for personal use only - asx · barra da tijuca – rio de janeiro for personal use only brazil...

Australian Financial Services License No.245421

LEAD MANAGER

PROSPECTUSPARINGA RESOURCES LIMITEDACN 155 933 010

For the issue of 33,333,333 ordinary fully paid shares in Paringa Resources Limited at a price of $0.30 per share to raise approximately $10,000,000.

The Shares offered by this Prospectus should be considered speculative. This document is important and requires your immediate attention. It should be read in its entirety. If you do not understand its contents or are in doubt as to the course you should follow, you should consult your stockbroker or professional adviser.

For

per

sona

l use

onl

y

IMPORTANT NOTICE

LODGEMENT AND LISTINGThis Prospectus is dated 15 October 2012 and a copy of this Prospectus was lodged with ASIC on that date. ASIC and ASX take no responsibility for the contents of this Prospectus.

No Shares will be issued on the basis of this Prospectus later than 13 months after the date of this Prospectus. Application will be made within 7 days after the date of this Prospectus for permission for the Shares offered by this Prospectus to be listed for quotation on ASX.

EXPOSURE PERIODThe Corporations Act prohibits the Company from processing applications to subscribe for Shares under this Prospectus (Applications) in the seven day period after the date of lodgement of this Prospectus (Exposure Period). This period may be extended by ASIC by up to a further seven days. The Exposure Period is to enable this Prospectus to be examined by market participants prior to the raising of funds. The examination may result in the identification of deficiencies in this Prospectus, in which case any Application may need to be dealt with in accordance with Section 724 of the Corporations Act. Applications received during the Exposure Period will not be processed until after the expiry of that period. No preference will be conferred on Applications received during the Exposure Period.

SELLING RESTRICTIONSThis Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or invitation. The distribution of this Prospectus in jurisdictions outside Australia may be restricted by law and persons who come into possession of this Prospectus should seek advice and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities law.

No action has been taken to register or qualify the Shares or the Offer, or otherwise permit a public offering of the Shares, in any jurisdiction outside Australia.

This Prospectus may not be released or distributed by you in the United States or to, or for the account or benefit of US Persons.

The Shares have not been, and will not be, registered under the US Securities Act 1933 and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons except in accordance with an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act 1933 and any other applicable securities laws.

NOTE TO PERSONAL OFFER APPLICANTSApplicants should read this document in its entirety and, if in any doubt, consult with their professional advisors before deciding whether to apply for Shares. There are risks associated with an investment in the Company and the Shares offered under this Prospectus must be regarded as a speculative investment. The Shares offered under this Prospectus carry no guarantee with respect to return on capital investment, payment of dividends or future value.

OBTAINING A COPY OF THIS PROSPECTUSThis Prospectus will be issued in paper form and as an Electronic Prospectus, which may be viewed online at and downloaded from www.paringaresources.com. The Offer is available only to persons who are Australian residents and who access the electronic version of this Prospectus from within Australia. The Corporations Act prohibits any person from passing onto another person the Application Form unless it is attached to or accompanied by a complete and unaltered hard-copy version of this Prospectus. During the Offer Period, any person may obtain a hard copy of this Prospectus by contacting the Company by e-mail at [email protected].

PHOTOGRAPHS AND DIAGRAMSPhotographs and diagrams used in this Prospectus that do not have descriptions are for illustration only and should not be interpreted to mean that any person shown in them endorses this Prospectus or its contents or that the assets shown in them are owned by the Company. Diagrams used in this Prospectus are illustrative only and may not be drawn to scale. Unless otherwise stated, all data contained in charts, graphs and tables is based on information available at the date of this Prospectus.

DEFINED TERMSCertain abbreviations and other defined terms are used throughout this Prospectus. Defined terms are generally identifiable by the use of an upper case first letter. Details of the definitions and abbreviations used are set out in Section 12.

For

per

sona

l use

onl

y

1PROSPECTUS

CORPORATE DIRECTORY 2

KEY OFFER INFORMATION 3

KEY OFFER STATISTICS 3

CHAIRMAN’S LETTER 4

1 INVESTMENT SUMMARY 5

2 DETAILS OF THE OFFER 12

3 DIRECTORS AND MANAGEMENT 15

4 INDUSTRY OVERVIEW 16

5 COMPANY AND PROJECTS 17

6 INDEPENDENT GEOLOGIST’S REPORT 32

7 BRAZILIAN COUNSEL LEGAL OPINION 127

8 FINANCIAL INFORMATION AND 172INVESTIGATING ACCOUNTANT’S REPORT

9 RISK FACTORS 184

10 CORPORATE GOVERNANCE 187

11 ADDITIONAL INFORMATION 192

12 DEFINITIONS 199

13 DIRECTORS’ STATEMENT 200

14 APPLICATION FORM 201

FIGURE 1: PARINGA PROJECT LOCATIONS 19

FIGURE 2: MINAÇU GOLD PROJECT LOCATION 21AND PROXIMITY TO MAJOR CITIES

FIGURE 3: MINAÇU GOLD PROJECT EXPLORATION 22LICENSES AND REGIONAL GEOLOGY

FIGURE 4: MINAÇU GOLD PROJECT SURFACE WORKINGS 23AND MINERALISED TRENDS

FIGURE 5: TRINCHEIRÃO PROSPECT WORKINGS LOOKING NNE 24

FIGURE 6: SÃO LUIS GOLD PROJECT LOCATION 25WITH GUYANA SHIELD AND WEST AFRICAN CRATON

FIGURE 7: SÃO LUIS GOLD PROJECT TARGETS OVER 26MAGNETIC IMAGE AND STRUCTURAL TRENDS

FIGURE 8: GRAPHITE AND MANGANESE BELTS 27IN MANTEQUEIRA PROVINCE SE BRAZIL

FIGURE 9: SANTO ANTÔNIO DE PÁDUA EXPLORATION 28LICENSE APPLICATIONS

FIGURE 10: SANTO ANTÔNIO DE PÁDUA GRAPHITE PROJECT 29PROSPECTIVE STRATIGRAPHY AND C% ASSAYS FROM RECONNAISSANCE SAMPLING

FIGURE 11: SÃO FÍDELIS GRAPHITE PROJECT HISTORICAL MINES 30AND PROSPECTS

FIGURE 12: PARINGA PROJECT BUDGET AND SCHEDULE 31

CONTENTS

TABLE OF FIGURES

For

per

sona

l use

onl

y

PARINGA RESOURCES LIMITED2

CORPORATE DIRECTORY

DIRECTORS

David Griffiths (Non-Executive Chairman)David Chapman (Managing Director)Jonathan King (Technical Director)Luis Mauricio Azevedo (Non-Executive Director)

COMPANY SECRETARY

Nicholas Day

REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS

Suite 4, Level 3,83-85 South Perth EsplanadeSOUTH PERTH WA 6151

Telephone: +61 8 6313 3800Email: [email protected]: www.paringaresources.com

SHARE REGISTRY*

Security Transfer Registrars Pty Ltd770 Canning HighwayAPPLECROSS WA 6953

LEAD MANAGER

E.L. & C. Baillieu Stockbroking Ltd.Level 26, 360 Collins StreetMELBOURNE VIC 3000

PROPOSED ASX CODE

PNL

* For information purposes only

AUDITOR

Grant Thornton Audit Pty Ltd1/10 Kings Park RoadWEST PERTH WA 6005

INVESTIGATING ACCOUNTANT

Grant Thornton Corporate Finance Pty Ltd1/10 Kings Park RoadWEST PERTH WA 6005

INDEPENDENT GEOLOGIST

Coffey Mining Pty Ltd.1162 Hay StreetWEST PERTH WA 6005

COUNSEL TO THE COMPANY

In Australia:Gilbert + Tobin1202 Hay StreetWEST PERTH WA 6005

In Brazil:FFA LegalAv. Jornalista Ricardo Marinho, 360, sala 113Ed. CosmopolitanBarra da Tijuca – Rio de JaneiroBRAZIL 22631-350

For

per

sona

l use

onl

y

PROSPECTUS 3

KEY OFFER INFORMATION

Event Day

Prospectus Lodgement Date 15 October 2012

Priority Offer Record Date 5:00pm (WST)19 October 2012

Opening of the Offer 29 October 2012

Closing of the Offer 23 November 2012

Allotment of Shares and Completion of the Offer 30 November 2012

Expected completion of dispatch of holding statements and any refund payments required 3 December 2012

Expected commencement of trading on ASX 7 December 2012

This timetable is indicative only and Applicants are encouraged to submit their Applications as early as possible. The Company, in consultation with the Lead Manager, has the right to close the Offer early, to accept late Applications, or vary any other date and time without prior notice (subject to the requirement that the Minimum Subscription condition must be satisfied within 4 months of the date of this Prospectus).

KEY OFFER STATISTICS

Category Statistic

Offer Price $0.30 per Share

Total number of Shares offered under the Offer 33,333,333

Total number of Shares on issue on Completion of the Offer1 61,083,334

Total number of Options on issue on Completion of the Offer2 2,550,000

Total cash proceeds from the Offer3 $9,999,999.90

1. Includes 7,750,001 Shares on issue at the date of this Prospectus and 20,000,000 to be issued to Silver Lake on the Conditional Approval Date in accordance with the Silver Lake Loan Agreement.

2. Terms of the Unlisted Options are set out in Section 11.3.

3. The Company has no pro forma debt as at the Conditional Approval Date.

For

per

sona

l use

onl

y


CHAIRMAN’S LETTER

Dear Investor,

On behalf of the Directors of Paringa Resources Limited (Paringa or the Company), it is my pleasure to invite you to become a shareholder in the Company.

Paringa holds interests in gold, gold-copper and graphite exploration projects (Projects) in Brazil, in regions which have demonstrated endowment and have infrastructure in place.

The Company’s clear goal is to build a successful resource company through the exploration and future exploitation of its Projects.

A key focus is on exploration at the Minaçu Gold Project which has several historical gold workings from which approximately 120,000oz at a premium grade were mined by artisanal miners in the 1980’s and 1990’s. The project area has had limited exploration since the 1990’s and the Company’s two year exploration program is based on the existence of gold occurrences and deposits, regional geological features, gold anomalies, presence of gossanous material and quartz veins.

The São Luis Gold Project in northern Brazil lies within the São Luis Craton which is the extension of both the Guyana Shield (known gold endowment of over 100Moz) and West African Craton. The Paringa tenements cover a significant strike length of areas of high magnetic relief and overlie the interpreted extension to Proterozoic greenstones and structures associated with major gold deposits and occurrences. The Company intends to carry out a progressive two-phase exploration programme at the São Luis Gold Project.

Brazil is responsible for approximately 7% of the global graphite production and approximately 26% of production outside of China. Paringa has two graphite projects, the Santo Antônio de Pádua Graphite Project and the São Fidélis Graphite Project both located in northern Rio de Janeiro State, in regions that have produced very high grade and quality graphite. Subject to exploration licenses being granted, Paringa intends to carry out a two year exploration programme including geological structure mapping, rock-chip sampling, and preliminary petrography and trenching to sample mineralised zones. These graphite projects have significant potential for Paringa.

Driving Paringa’s strategy is a management team with proven corporate, exploration, project development and production track records, which will take a disciplined approach to maximise the value of the current portfolio and increase shareholder value through future growth.

Paringa is seeking to raise approximately $10,000,000 through the issue of 33,333,333 Shares at an issue price of $0.30 each to provide funds to achieve its immediate objective of exploring the current portfolio and to develop a strong project pipeline.

Before making any decision on this investment I recommend you read the Prospectus in its entirety and seek professional advice as appropriate.

Paringa has a solid foundation on which to commence its corporate endeavours, capitalising on its significant exploration prospectivity under the guidance of an experienced professional team.

The Directors join me in offering you this exciting opportunity to participate in the ownership of Paringa and I look forward to welcoming you as a Shareholder of the Company.

Yours sincerely

David GriffithsChairman

Paringa Resources Limited

For

per

sona

l use

onl

y

PROSPECTUS 5

SECTION 1 INVESTMENT SUMMARY

This section is not intended to provide full information for investors intending to apply for Shares.

This Prospectus should be read and considered in its entirety.

1.1 INTRODUCTION

The Company was incorporated on 27 February 2012 for the purposes of acquiring high quality mineral exploration or production assets in Brazil.

Paringa has four projects that comprise 59.43km² of granted tenements and 1,512.49km² of tenements under application.

Minaçu Gold ProjectThe Minaçu Gold Project is an advanced exploration property in central Brazil, where multiple gold occurrences, which have estimated production of 120,000oz at a premium grade, have been identified from previous artisanal mining, university research and exploration. Sampling of surface workings indicate potential for narrow-vein, high-grade gold mineralisation.

São Luis Gold ProjectThe São Luis Gold Project is an early-stage exploration program for greenstone-hosted gold within the São Luis Craton which is the extension in northeast Brazil of the highly – gold endowed West African Craton and Guyana Shield. Paringa has tenement applications covering more than 1,250km² over magnetic and structural targets which are interpreted to be the Proterozoic granite-greenstone stratigraphy which host the gold deposits in the region.

São Fidélis Graphite ProjectThe São Fidélis Graphite Project produced very high grade and quality graphite during the two world wars and at least three abandoned mines exist in the project area. There has been no systematic recent exploration.

Santo Antônio de Pádua Graphite ProjectThe Santo Antônio de Pádua Graphite Project is an early-stage graphite project located in Rio de Janeiro State, southeast Brazil, where university research has identified additional graphite and manganese occurrences to those known from the Mines Department mineral occurrence database and exploitation of manganese during World War I.

1.2 INVESTMENT HIGHLIGHTS

1.2.1 Portfolio of 100% owned Projects in highly prospective regions of BrazilParinga has four Projects:

> Minaçu Gold Project – comprising three exploration licenses covering 59.43km² in central Brazil;

> São Luis Gold Project – comprising 13 applications for exploration licenses in seven blocks covering 1,252km² in northern Brazil;

> Santo Antônio de Pádua Graphite Project – comprising twelve exploration license applications covering 224.6km² in the south east of Brazil; and

> São Fidélis Graphite Project – comprising two exploration license applications covering 35.91km².

1.2.2 Clearly defined Project Development StrategyParinga has a clearly defined two phase, two year exploration programme with the goal to defining a significant gold resource at its Minacu Gold Project and identifying further significant gold/gold/copper and graphite resources.

1.2.3 Experienced Board and executive team focussed on Brazil, with a track record of discovery and developmentParinga’s Board and executive team have significant experience in the resources industry with members having previous roles with some of Australia’s and the world’s most recognised resources companies.

Members of Paringa’s Board and executive team have been involved in delivering key projects around the globe and particularly in Brazil.

1.2.4 Projects located in Brazil, a country highly supportive of minerals projectsGold production in 2010 in Brazil was 62 tonnes which was about 2.3% of global production placing Brazil in 13th position in a ranking of producers with China, Australia and the United States in the lead. Approximately 10% of Brazil’s production was derived from artisanal miners and the balance mainly from the four major producers Kinross Gold Corporation, Anglogold Ashanti Limited, Yamana Gold Incorporated and Jaguar Mining Incorporated. Geographically, most of the gold was sourced in 2010 from the States of Minas Gerais and Goiás with a combined 64% of total production.

Brazil is responsible for 7% of the global graphite production of about 1.3 million tonnes, or approximately 26% of production outside of China. Brazil’s production in 2010 was 88,000 tonnes derived from small-scale operations in the States of Minas Gerais and Bahia. The Company understands, there are only two companies, Nacional de Grafite Ltda and Extrativa Metalquimica S/A, involved in graphite production and beneficiation in Brazil. In addition Magnesita Refratórios S/A is licensing the R$80M Almenara deposit for production of 40,000 tonnes per annum from 2014.

1.2.5 Company’s Interest in Projects

Paringa ResourcesLimited (Australia) 100%1 Paringa Mineracão

Limitada (Brazil)

Minaçu GoldProject2

São Luis GoldProject3

Santo Antônio dePadua Graphite

Project4

São Fidélis Graphite Project5

For

per

sona

l use

onl

y


Notes:1. Paringa is the registered holder of 99.9% of the quotas in Paringa Brazil.

The remaining 0.1% of quotas is held on trust for Paringa. Refer to Section 7 for further details.

2. The Minaçu Gold Project comprises three granted tenements. The tenements are held by Paringa Brazil. Refer to Section 7 for further details.

3. The São Luis Gold Project comprises 13 tenement applications. A mineral rights transfer agreement will be lodged with the DNPM once the applications are granted as applications are not transferable under Brazilian law. Refer to Section 7 for further details.

4. The Santo Antônio de Pádua Graphite Project comprises 12 tenement applications. The tenement applications are held by Paringa Brazil. Refer to Section 7 for further details.

5. The São Fidélis Graphite Project comprises two tenement applications. The tenement applications are held by Paringa Brazil. Refer to Section 7 for further details.

Please refer to the Independent Geologist’s Report set out in Section 6 and the Brazilian Counsel Legal Opinion set out in Section 7 of this Prospectus for more detailed information.

Minaçu Gold ProjectThe Minaçu Gold Project is 100%-owned by Paringa Brazil, a wholly owned subsidiary the Company. The project is located on the border of Goiás and Tocantins states in central Brazil, approximately 280km north of Brasília. The Minaçu Gold Project comprises three exploration licenses covering 59.43km². In June 2012, Paringa Brazil acquired the mineral rights and a summary of this agreement is set out in Section 7. The exploration licenses have been transferred to Paringa Brazil.

> Lies over the same rocks which elsewhere host significant gold mineralisation, including the 20.6Moz Morro de Ouro/Paracatu (Kinross Gold Corporation), Aurumina (Toniollo, Busnello S/A) and Cavalcante (Empresa Sul-Americana de Montagens S/A) deposits.

> Includes numerous historical gold workings from which 120,000oz were mined at a premium grade, forming walk-up drill targets.

> Channel and face sampling of these workings returned values such as 10m @ 19.64g/t Au; 4m @ 29.2g/t Au; 3m @ 31.35g/t Au; 1.6m @ 11.3g/t Au; and 2m @ 8.64g/t.

> Numerous regional targets that have never received systematic follow-up exploration.

São Luis Gold ProjectThe São Luis Gold Project is located on the border of Pará and Maranhão States in northern Brazil, about 250km east of Belém and comprises 13 applications for exploration licenses in seven blocks covering 1,252km² in the name of Brazil Americas Investments & Participation Mineração Ltda (BAIP). On 13 August 2012, Paringa Brazil signed an agreement to acquire 100% interest in the São Luis Gold Project from BAIP, a summary of this agreement is set out in Section 7.

> Significant land position in the São Luis Craton over previously undefined greenstone sequences in the extension to the Guyana Shield; host to over 100 million ounces of Au.

> Known gold resources in the São Luis Craton total over 6Moz, including Piaba-Tatajuba (3.2Moz), Cipoeiro (1.8Moz), and Cachoeira (0.7Moz).

> Tenements cover over 1,250km² of similar geological environments and structures to those which elsewhere host gold deposits within the São Luis Craton and the Guyana Shield.

Santo Antônio de Pádua Graphite ProjectThe Santo Antônio de Pádua Graphite Project is 100%-owned by Paringa Brazil. The Santo Antônio de Pádua Graphite Project is located in Rio de Janeiro State, about 185km northeast of Rio de Janeiro city and comprises 12 exploration license applications covering 224.6km².

> Lies within a highly complex structural province which hosts all of Brazil’s current graphite-producing operations.

> Covers almost the entire 60km strike length of one of 35 Manganese ± Graphite-bearing belts.

> Individual graphite-bearing lenses can form zones up to 15m wide.

> Total carbon contents range from 3.14%C to >15.0%C in eight rock-chip samples.

> Good potential for locating flake graphite in high-tonnage, low-grade disseminated mineralisation and in vein-type high-grade crystalline lump and/or flake mineralisation.

São Fidélis Graphite ProjectThe São Fidélis Graphite Project is 100%-owned by Paringa Brazil. The project is located in Rio de Janeiro State, about 190km east northeast of Rio de Janeiro city. The São Fidélis Graphite Project comprises two exploration license applications covering 35.91km².

> The project contains three inactive graphite mines.

> The operations produced very high grade and quality graphite.

> The grades mined were between 35%C and 40%C with more selective production in the range 60%C to 70%C.

A detailed description of the Projects and the Company’s proposed exploration programmes is set out in Section 5.5 and in the Independent Geologist’s Report in Section 6.

1.3 SUMMARY OF THE OFFER

By this Prospectus, the Company offers 33,333,333 Shares at $0.30 each, to raise approximately $10,000,000.

The Shares to be issued will represent approximately 54.6%1 of the Shares on issue on Completion of the Offer.

Applicants who are not Silver Lake Resources Limited Shareholders should complete the enclosed Application Form and submit it, together with the necessary Application Monies to:

Security Transfer Registrars Pty Ltd770 Canning HighwayAPPLECROSS WA 6953

The Application Form together with the necessary Application Monies must be received by the Share Registry before 5:00pm, WST on Friday, 23 November 2012.

1 Based on 61,083,334 Shares on issue post completion of the Offer assuming no exercise of 2,550,000 Unlisted Options.

For

per

sona

l use

onl

y

PROSPECTUS 7

Applicants who are Silver Lake shareholders should apply on the basis of their personalised Application Form sent to them. If there are excess applications, priority will be given to Silver Lake Limited Shareholders as set out in Section 2.3.

If you are applying through a broker you should contact your broker for details on how to apply.

The rights attaching to the Shares are summarised in Section 11.2. Full details of the Offer are included in Section 2.

Customer service representatives are available between 9.00am and 4.00pm AESDT, on any Business Day, during the Offer Period by calling the Lead Manager on 1800 339 521.

If you are unclear or uncertain as to whether Paringa is a suitable investment for you, you should seek professional guidance from your solicitor, stockbroker, accountant or other independent and qualified professional adviser before deciding whether to invest.

1.4 INDICATIVE TIMETABLE

Event Date

Date of Prospectus 15 October 2012

Priority Offer Record Date 5:00pm (WST)19 October 2012

Opening Date 29 October 2012

Closing Date 5.00pm WST 23 November 2012

Allotment of Shares and Despatch of Holding Statements

30 November 2012

Quotation of Shares on ASX 7 December 2012

Notes:1. The Directors reserve the right to vary the above dates for any reason,

subject to the requirements of ASIC, ASX, the Corporations Act and the Listing Rules.

2. The Directors reserve the right to open and close the Offer earlier or later than as indicated above without prior notice, subject to the requirements of ASIC, ASX, the Corporations Act and the Listing Rules.

The above are indicative dates only. The date the Shares are expected to be issued and/or commence trading on the Official List may vary with any change to the Closing Date.

Applicants are encouraged to apply as soon as possible after the Offer opens as the Offer may close earlier than the date specified above. The Company also reserves the right not to continue with the Offer at any time before the allotment of Shares to Applicants.

1.5 PURPOSE OF THE OFFER

The purpose of the Offer is to raise adequate funds to:

> initiate exploration for gold on the Minaçu Gold Project and the São Luis Gold Project tenements and graphite on the São Fidélis and Santo Antônio de Pádua Graphite Projects, and enable the granting of tenement applications on the Company’s Projects;

> meet the progressive option payment and minimum expenditure obligations where appropriate for the Minaçu Gold Project;

> pursue other strategic exploration or mining opportunities as they arise;

> fund the admission of the Company to the Official List and the costs associated with this process; and

> provide working capital, administration and corporate overhead costs for the Company.

1.6 USE OF FUNDS

The funds raised from the Offer will be applied as set out in the table below.

Sources and Uses

Year 1($’000)

Year 2($’000)

Total($’000)

Cash reserves 31 July 2012

– – –

Proceeds from shares issued to Directors

58 58

Balance of loan facility from Silver Lake 1

907 907

Funds raised under the Offer

10,000 – 10,000

Less: Cost of the issue

(807) – (807)

Less: Funds Applied (3,508) (6,241) (9,749)

Total Funds Available

6,650 409 409

Notes:1. Silver Lake has agreed to convert this loan to equity on the Conditional

Approval Date in accordance with the Silver Lake Loan Agreement as summarised in Section 11.4.F

or p

erso

nal u

se o

nly


Allocation of Funds by Project

Year 1($’000)

Year 2($’000)

Total($’000)

Minaçu Gold Project

1,527.5 3,723.5 5,251.0

São Luis Gold Project

823.5 1,092.5 1,916.0

Santo Antônio de Pádua Graphite Project

139.0 270.0 409.0

São Fidélis Graphite Project

118.0 255.0 373.0

Working Capital, Administration & Overheads

900.0 900.0 1,800.0

Total Funds Applied 3,508.0 6,241.0 9,749.0

Further details of the planned work program and expenditure for the Project’s activities are set out in Section 5.6 and in the Independent Geologist’s Report in Section 6.

In the event that the tenement applications of the São Luis Gold Project, Santo Antônio de Pádua Graphite Project, and São Fidélis Graphite Project are not granted within the two year period, the funds allocated to those projects will used to:

i. Carry out reconnaissance stream sediment geochemical surveys, geological mapping and outcrop sampling at the São Luis Gold Project, Santo Antônio de Pádua Graphite Project, and São Fidélis Graphite Project to enable rapid prioritisation of activities once the tenement applications are granted.

ii. Complete additional drilling at the Minaçu Gold Project to increase resource confidence and enable a broader and more comprehensive drill test program of known workings and targets. High level metallurgical testwork and mine planning will also be started to underpin scoping level project economic assessments.

iii. Increase the focus on developing a strong project pipeline targeting Brazil-wide high priority opportunities on granted tenure including but not restricted to, the existing option agreement on Riacho de Santana Graphite Project, and the gold-copper Gentio de Ouro tender. Refer to Section 7 for further information on the Riacho de Santana Graphite Project and the Gentio de Ouro tender.

The above expenditure table is subject to change and is contingent on circumstances, results and other opportunities and events. Expenditure may be reallocated by the Company amongst existing or new projects or to general working capital and refined to suit the results of the Company’s work programs as they proceed. Further, the Company will evaluate other opportunities and events as they arise.

1.7 WORKING CAPITAL ADEQUACY

The Directors are of the opinion that on completion of the Offer, the Company will have sufficient working capital to carry out its stated objectives in Section 1.5.

1.8 CAPITAL STRUCTURE

NumberPost Offer

Percentage

Shares1

Shares on issue at the date of this Prospectus

7,750,001 12.7%

Shares to be issued on the Conditional Approval Date2

20,000,000 32.7%

Shares to be issued pursuant to the Offer

33,333,333 54.6%

Total Shares on issue 61,083,334 100.0%

Options

Unlisted Options on issue at the date of this Prospectus3

2,550,000 –

Total Options on issue 2,550,000 –

Notes:1. The rights attaching to Shares are summarised in Section 11.2.

2. 20,000,000 of these Shares will be issued to Silver Lake on the Conditional Approval Date in accordance with Silver Lake Loan Agreement as summarised in Section 11.4.

3. The terms of the Unlisted Options are set out in Section 11.3.

Details of the current Shareholders and their post Offer holdings are set out in Section 1.14.

1.9 MINIMUM SUBSCRIPTION

The minimum subscription of the Offer is $9,999,999.90. Oversubscriptions will not be accepted.

1.10 DIVIDEND POLICY

The Company anticipates that significant expenditure will be incurred in the further evaluation of the Projects. These activities are expected to dominate the Company’s activities and expenditure during the early years following the issue of this Prospectus. Accordingly, the Company does not expect to declare any dividends during this period. Once sustainable profitability has been established, and subject to working capital and reinvestment requirements, it is planned to distribute a proportion of future profits to Shareholders by way of the payment of dividends.

1.11 FINANCIAL INFORMATION

The Company was incorporated on 27 February 2012 and has no operating history and limited historical financial performance. As a result, the Company is not in a position to disclose any key financial ratios, other than the financial statements set out in Section 8 of this Prospectus.

Financial information for the Company is included in the Investing Accountant’s Report in Section 8 of this Prospectus.

Given the speculative nature of mineral exploration and development and the fact there is a significant amount of work to be undertaken before the completion of a definitive

For

per

sona

l use

onl

y

PROSPECTUS 9

feasibility study and commencement of any commercial production on the Projects, including obtaining all necessary governmental approvals, there are significant uncertainties associated with forecasting future revenues and expenses of the Company. On this basis and after considering ASIC Regulatory Guide 170, the Directors believe that reliable financial forecasts for the Company cannot be prepared and accordingly have not included financial forecasts in this Prospectus.

1.12 KEY RISKS

Prospective investors in the Company should be aware that subscribing for Shares in the Company involves a number of risks. Paringa proposes to be an exploration and mining company and an investment in it should be considered speculative. The key risk factors of which investors should be aware are described in Section 9. Investors are urged to consider these risks carefully before deciding whether to invest in the Company.

In particular investors should be aware of the following risks:

1.12.1 Title RiskThere are a number of conditions that the Company must satisfy with respect to the Projects to keep the Projects in good standing. These include but are not limited to license fee payments, annual reporting requirements (mining, safety and environmental), annual plan filing requirements (mining and environmental), the establishment and maintenance of an environmental reclamation fund, and various other permits, approvals, and consents including the procurement of appropriate land and water use agreements. The Company’s exploration licenses are issued for an initial three-year term, which is renewable once before a Mining License must be obtained. There can be no assurance that the Company will be able to renew its exploration licenses or convert such licenses into forms appropriate for ongoing operations, or if such licenses or permits are granted, that the Company will be in a position to comply with all conditions imposed.

The Company has also made, or has acquired an interest in, a number of applications for exploration licenses. There is no guarantee that those applications will be successful. Please refer to Section 7 for further details on the applications and a summary of Brazilian mining law to which those applications are subject.

In addition to any regulatory requirements the Company must meet to maintain its tenements, Paringa Brazil (a wholly owned subsidiary of the Company) has entered into a number of agreements whereby it has acquired a 100% legal interest in certain tenements. Paringa Brazil has contractually agreed with the vendors of such tenements to undertake certain obligations during specified periods. If Paringa Brazil does not comply with those contractual obligations, there is a risk it will be required to transfer the tenements back to the vendors in accordance with the agreements pursuant to which those tenements were acquired. A summary of the agreements is set out in Section 7 of this Prospectus.

1.12.2 Exploration SuccessDespite the best efforts of the Company, there can be no assurance exploration on the Projects, or any other tenements which may be acquired by the Company in the

future, will result in the discovery of a deposit that is on economically viable deposit on the Projects or on any other tenements which may be acquired. Even if an apparently viable mineral deposit is identified, there is no guarantee it can be profitably exploited.

1.12.3 Exploitation SuccessThe Projects are at an early stage of exploration and potential investors should understand that mineral exploitation is a high risk undertaking. There can be no assurance that exploitation of the Projects described in this Prospectus, or any other tenements which may be acquired in the future, will result in economic gains for the Company or be or remain economically viable.

1.12.4 Operating RisksThe current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of operational factors.

The Projects will be subject to extreme climatic conditions which restrict the period of exploration, appraisal and possible production activities which may take place and may also place Company personnel at risk if exposed to these extreme conditions.

A summary of factors which may affect the operations of the Company include:

> geological conditions;

> unanticipated operational and technical difficulties encountered in geophysical surveys, drilling and production activities;

> unavailability of aircraft or drilling equipment to undertake airborne electromagnetic and other geological and geophysical investigations;

> unexpected shortages or increases in the cost of consumables, spare parts, plant and equipment;

> prevention or restriction of access by reason of inability to obtain consents or approvals;

> current exploration operations and future mine development on the Projects are subject to the Company’s ability to obtain a wide range of permits, licenses and approvals and there is no guarantee such permits, licenses and approvals will be granted or will be granted in a timely manner;

> advancement of the exploration operations (if successful) to mine development and full commercial production can be a lengthy process taking a number of years where the Projects may be subject to new laws, regulations, and taxes which may have a material impact on the Company; and

> restriction of access to infrastructure due to decisions of Brazilian authorities.

1.12.5 Development RisksThe operations of the Company may be affected by various other factors, including the failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes, and

For

per

sona

l use

onl

y


unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

1.12.6 Environmental RisksThe Projects are subject to Brazilian laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds.

The Company intends to conduct its activities in an environmentally responsible manner and in accordance with applicable laws and industry standards. Areas disturbed by the Company’s activities will be rehabilitated as required by applicable laws and regulations.

1.12.7 Financing RequirementsThe Company is likely to need to undertake a further capital raising in the future to continue the necessary development work on the Projects. The Company intends to complete a definitive feasibility study to support that further fund raising.

The Directors can give no assurances as to the level of future borrowings or further capital raisings that will be required to meet their longer term aims for the Company to complete the development of the Projects and to the extent such borrowings or capital raisings are required, whether they can be obtained on terms favourable to the Company.

Any additional equity financing may be dilutive to Shareholders and any debt financing, if available, may involve restrictive covenants, which may limit the Company’s operations and business strategy.

Unless, and until, the Company develops or acquires income producing assets, it will be dependent upon the funds raised by the Offer (and interest earned on those funds) and its ability to obtain future equity or debt funding to support exploration, evaluation and development of the properties in which it has an interest. In addition, the Company’s Share price and its ability to raise future funds are likely to be significantly impacted by commodity prices and market conditions.

The Company’s ability to raise further equity, or debt, or to divest part of its interest in a project to raise funds or otherwise, and the terms of such transactions will vary according to a number of factors, including the success of exploration and the future development of the project, stock market conditions and prices for gold and graphite.

1.12.8 Unforeseen Expenditure RiskExpenditure may need to be incurred which has not been taken into account in the preparation of this Prospectus. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company.

1.12.9 Legal Risks Associated with Operating in BrazilThe Company’s Brazilian operations are subject to the jurisdiction of Brazil’s courts and this may result in risks such as:

1.12.9.1 a higher degree of discretion on the part of governmental agencies;

1.12.9.2 the lack of political or administrative guidance on implementing applicable rules or regulations including, in particular, local taxation and property rights; and

1.12.9.3 inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions.

The commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licenses and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that the licenses and other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of an enforcement of such arrangements cannot be assured. In the case where the Company disputes the actions of the State with regards to the Projects, it is unlikely the Company would be successful in raising a claim in Australian courts for the reasons of comity or the doctrine of sovereign immunity.

1.12.10 Sovereign RiskAdverse changes in the government policies or legislation in Brazil (and other regulatory bodies) affecting taxation, profit reparation, royalties, exploration and mining activities may affect the future operations of the Company. Should there be a material change in the political, legal and social environments in Brazil, the Director’s may reassess investments, decisions and commitments to its Brazilian assets.

1.12.11 Fluctuation in Exchange RatesAny revenue generated by the Company is expected to be in US$ or Brazilian Real (R$) while its cost base would be expected to be in A$, R$ and US$.

Consequently the cross exchange rates for these currencies will have an impact on any of the Company’s earnings (if achieved) in A$. The cross exchange rates are affected by numerous factors beyond the control of the Company. These factors include Australia’s, Brazil’s and the USA’s economic conditions and outlook for interest rates, inflation and other economic factors. These factors may have a positive or negative effect on the Company’s exploration, project development and production plans and activities, together with the ability to fund those plans and activities.

Please refer to Section 9 for further details on the risks associated with investing in the Company.

1.13 DIRECTORS

The Directors of the Company are:

Name Position

Mr David Griffiths Non-Executive Director

Mr David Chapman Managing Director

Mr Jonathan King Technical Director

Mr Luis Mauricio Azevedo Non-Executive Director

A summary of each Director’s qualifications and experience is set out in Section 3.

For

per

sona

l use

onl

y

PROSPECTUS 11

1.14 RELATED PARTY ARRANGEMENTS

The existing Shareholders in the Company are set out below:

ShareholderOrdinary

SharesCurrent

%Post IPO

%

Silver Lake 20,000,001 1 72.1% 32.7%

David Griffiths 750,000 2.7% 1.2%

David Chapman

3,000,000 10.8% 4.9%

Jonathan King 1,000,000 3.6% 1.6%

Luis Mauricio Azevedo

1,500,000 5.4% 2.5%

Paulo Ilidio Brito

1,500,000 5.4% 2.5%

Total 27,750,001 100% 45.4%

Notes:1. 20,000,000 of these Shares will be issued to Silver Lake on the

Conditional Approval Date in accordance with Silver Lake Loan Agreement as summarised in Section 11.4.

The existing Shareholders will enter into escrow arrangements and, subject to certain exceptions, may not dispose of their Shares for the period required by the ASX Listing Rules.

The Company has entered into the Silver Lake Loan Agreement with Silver Lake. A summary of the Silver Lake Loan Agreement is set out in Section 11.4.

The Company has entered into the Silver Lake Shareholder’s Deed with Silver Lake in relation to certain rights of Silver Lake in relation to its capacity as a Shareholder, including the right to nominate persons to the Board and a “top up” to maintain its equity interest in the Company. A summary of the Silver Lake Shareholder’s Deed is set out in Section 11.4.

The Directors interests in the Company on listing are set out below:

DirectorOrdinary

SharesUnlisted Options

David Griffiths 750,000 250,000

David Chapman 3,000,000 1,000,000

Jonathan King 1,000,000 300,000

Luis Mauricio Azevedo 1,500,000 500,000

Total 6,250,000 2,050,000

Directors and other management are entitled to remuneration and fees on ordinary commercial terms.

i. Executive Services Agreement – David Chapman

The Managing Director, Mr David Chapman, is employed under a service agreement, which commences on the day on which Paringa lists on the ASX. Total remuneration package is $330,000 per annum less applicable taxes and is exclusive of superannuation. Superannuation contributions are made at a rate of 10% p.a. A more detailed summary of this agreement is set out in Section 11.5.

ii. Executive Services Agreement – Jonathan King

The Technical Director, Mr King, is employed under a service agreement, which commences on the day on which Paringa lists on the ASX. Total remuneration package is $220,000 per annum less applicable taxes and is exclusive of superannuation. Superannuation contributions are made at a rate of 10% p.a. A more detailed summary of this agreement is set out in Section 11.5.

iii. Non-Executive Director’s Letters of Appointment

Non-Executive Directors’ letters of appointment provide that David John Griffiths (Non-Executive Chairman) will receive Directors’ fees of $70,000 per annum and Luis Mauricio Azevedo (Non-Executive Director) will receive Directors’ fees of $40,000 per annum, effective from the date Paringa is listed on the ASX.

iv. Deeds of Indemnity, Access and Insurance

The Company has entered into deeds of indemnity, insurance and access with each of its appointed Directors. Under such deeds, the Company has agreed to indemnify each Director to the extent permitted by law against any liability arising as a result of that Director acting in the capacity as an officer of the Company. A more detailed summary of these deeds is set out in Section 11.5.

Advisers and other service providers are entitled to fees for services.

Mr Azevedo is partner of FFA Legal, the Company’s Brazilian counsel. Section 11.6 sets out the amounts that have been paid by the Company to FFA Legal.

Further details of the Company’s arrangements with its related parties are set out in Sections 11.4, 11.5 and 11.6.

1.15 REPORTS

This Prospectus includes an Independent Geologist’s Report, a Brazilian Counsel Legal Opinion and an Investigating Accountant’s Report in Section 6, Section 7 and Section 8, respectively.F

or p

erso

nal u

se o

nly


SECTION 2 DETAILS OF THE OFFER

2.1 THE OFFER

By this Prospectus, the Company offers for subscription a total of 33,333,333 Shares at an issue price of $0.30 each to raise approximately $10,000,000 (before costs).

2.2 PRIORITY OFFER AND PUBLIC OFFER

Priority OfferPriority allocation will be given to Silver Lake shareholders with a registered address in Australia or New Zealand and owning one or more Silver Lake shares as at the Priority Offer Record Date (being 5:00pm (WST) Friday, 19 October 2012). To the extent possible, each qualifying Silver Lake shareholder will have entitlement to a minimum of 6,667 Shares (being $2,000 worth of Shares).

Public OfferEligible investors can apply for Shares that are not allocated under the Priority Offer to Silver Lake shareholders.

2.3 APPLICATIONS FOR SHARES

Priority OfferIf you are eligible for the Priority Offer you will have received a letter from the Silver Lake Chairman, along with a blue application form pre-printed with your name and address accompanying this Prospectus.

If you are a Silver Lake shareholder with a registered address in Australia or New Zealand appearing on the Silver Lake share register as at 5:00pm (WST) on 19 October 2012 and wish to participate in the Priority Offer, you should complete the blue personalised Priority Offer Application Form which accompanies this Prospectus.

If you believe you are eligible for the Priority Offer but have not received a pre-printed application form please contact the Registry on (61 8) 9315 2333.

To the extent possible, each qualifying Silver Lake shareholder will have an entitlement to a minimum of 6,667 Shares, with the balance of the Shares applied for subject to scale-back on a proportional basis taking into consideration the size of the applicant’s holding in Silver Lake. The Company reserves the right to allot to an Applicant a lesser number of Shares than the number for which the Applicant applies or to reject an Application.

Applicants may apply for a minimum of 6,667 Shares representing a minimum investment of $2,000. Applicants requiring additional Shares must apply for Shares in multiples of 1,000 Shares (equivalent to $300) thereafter.

Applications for less than the minimum application of 6,667 Shares (equivalent to $2,000) will not be accepted.

If the number of Shares allotted is fewer than the number applied for, surplus Application Monies will be refunded without interest. The acceptance of Applications and the allocation of Shares are at the discretion of the Directors.

All completed Application Forms must be delivered to:

PARINGA RESOURCES LIMITED – SHARE ACCOUNTc/- Security Transfer Registrars Pty Ltd770 Canning HighwayAPPLECROSS WA 6953

OR

Posted to:

PARINGA RESOURCES LIMITED – SHARE ACCOUNTc/- Security Transfer Registrars Pty LtdPO BOX 535APPLECROSS WA 6953

No brokerage or stamp duty is payable by Applicants in respect of their Applications under this Prospectus. The amount payable on Application will not vary during the period of the Priority Offer and no further amount is payable on allotment.

Applications must be accompanied by payment in full in Australian currency of $0.30 for each Share applied for. Payment must be by way of cheque or bank draft drawn on and payable on an Australian bank and should be made payable to “Paringa Resources Limited – Share Account” and crossed “Not Negotiable”.


Priority Offer Application Forms must not be circulated to prospective investors unless accompanied by a copy of this Prospectus.

A duly completed and lodged Priority Offer Application Form will constitute an offer by the Applicant to subscribe for the number of Shares applied for pursuant to the Priority Offer Application Form.

Public OfferIf you wish to participate in the Public Offer, you should complete the Public Offer Application Form included at the end of this prospectus. Note that even if you have participated in the Priority Offer you are also entitled to participate in the Public Offer.

Applicants may apply for a minimum of 6,667 Shares representing a minimum investment of $2,000. Applicants requiring additional Shares must apply for Shares in multiples of 1,000 Shares (equivalent to $300) thereafter.

Applications for less than the minimum application of 6,667 Shares (equivalent to $2,000) will not be accepted.

The Company reserves the right to allot to an Applicant a lesser number of Shares than the number for which the Applicant applies or to reject an Application.

If the number of Shares allotted is fewer than the number applied for, surplus Application Monies will be refunded without interest. The acceptance of Applications and the allocation of Shares are at the discretion of the Directors.

All completed Application Forms must be delivered to:

PARINGA RESOURCES LIMITED – SHARE ACCOUNTc/- Security Transfer Registrars Pty Ltd770 Canning HighwayAPPLECROSS WA 6953

For

per

sona

l use

onl

y

PROSPECTUS 13

OR

Posted to:

PARINGA RESOURCES LIMITED – SHARE ACCOUNTc/- Security Transfer Registrars Pty LtdPO BOX 535APPLECROSS WA 6953

No brokerage or stamp duty is payable by Applicants in respect of their Applications under this Prospectus. The amount payable on Application will not vary during the period of the Public Offer and no further amount is payable on allotment.

Applications must be accompanied by payment in full in Australian currency of $0.30 for each Share applied for. Payment must be by way of cheque or bank draft drawn on and payable on an Australian bank and should be made payable to “Paringa Resources Limited – Share Account” and crossed “Not Negotiable”.


Public Offer Application Forms must not be circulated to prospective investors unless accompanied by a copy of this Prospectus.

A duly completed and lodged Public Offer Application Form will constitute an offer by the Applicant to subscribe for the number of Shares applied for pursuant to the Public Offer Application Form.

Applicants are encouraged to apply early as the Company reserves the right to close the Public Offer early.

2.4 ALLOTMENT AND ALLOCATION

Subject to ASX granting Conditional Listing Approval for the Company to be admitted to the Official List, the allotment of Shares to Applicants will occur as soon as possible after the Offer is closed, following which holding statements will be dispatched.

The Company will allocate the Shares under the Priority Offer as described in Section 2.2 and retains an absolute discretion in allocating Shares under the Public Offer and reserves the right not to accept any Applications.

The Directors of the Company retains an overriding right to accept any Application in full, accept any Application for a lesser number of Shares, or decline any Application. Before dealing in any Shares, Applicants must satisfy themselves as to their actual holding of Shares. If any Application is rejected, in whole or in part, the relevant Application Monies will be refunded without interest. Where the number of Shares issued is less than the number applied for by the Applicant, the surplus Application Monies will be returned by cheque within 14 days after the Closing Date. Where no Shares are issued, the Application Monies will be returned in full by cheque within 30 days of the Closing Date.

Irrespective of whether the allotment of Shares takes place, any interest earned by the Company on the Application Monies received with Applications will not be paid to Applicants.

The Company will not be liable to any person not allocated Shares in response to an Application made on the basis of this Prospectus.

2.5 APPLICATION MONIES HELD ON TRUST

All Application Monies will be held in trust in a separate account until allotment and issue. The account will be established and kept by the Company on behalf of the Applicants.

All interest earned on all Application Monies (including those which do not result in allotments of Shares) will be retained by the Company.

2.6 MINIMUM SUBSCRIPTION

The minimum subscription for the Offer is $9,999,999.90. No Shares will be issued pursuant to this Prospectus until the minimum subscription is reached and Conditional Listing Approval has been given by the ASX for the Company to be admitted to the Official List.

Should the minimum subscription not be reached within four (4) months after the date of this Prospectus, the Company will either repay the Application Monies to the Applicants or, issue a supplementary or replacement prospectus and allow Applicants one month to withdraw their Application and be repaid their Application Monies.

Interest will not be paid on Application Monies refunded.

2.7 NO OVERSUBSCRIPTIONS

Oversubscriptions will not be accepted.

2.8 UNDERWRITING

The Offer is not underwritten.

2.9 OVERSEAS INVESTORS

This Prospectus does not constitute an offer of Shares in any jurisdiction where, or to any person to whom, it would not be lawful to issue the Prospectus or make the Offer. It is the responsibility of any Applicant outside Australia to ensure compliance with all laws of any country relevant to their Application, and any such Applicant should consult their professional advisers as to whether any government or other consents are required, or whether any formalities need to be observed to enable them to apply for and be allocated Shares on the basis of this Prospectus.

No action has been taken to register or qualify the Shares or the Offer or otherwise to permit an offering of the Shares in any jurisdiction outside Australia. The return of a completed Application form will be taken by the Company to constitute a representation and warranty by the Applicant that all relevant approvals have been obtained.

The Offer made pursuant to the Electronic Prospectus is only available to persons receiving an electronic version of this Prospectus within Australia.

For

per

sona

l use

onl

y


2.10 BROKERAGE

No brokerage or stamp duty will be payable by Applicants subscribing for Shares.

2.11 LEAD MANAGER FEES

The Company has engaged E.L. & C. Baillieu Stockbroking Ltd as Lead Manager to the Offer. Further details of the fees payable to the Lead Manager are set out in Section 11.4.

2.12 ASX LISTING

Within 7 days after the date of this Prospectus, the Company will make an application to ASX for the Company to be admitted to the Official List and for admission of the Shares offered by this Prospectus, and the Shares currently on issue at the date of this Prospectus, to quotation on ASX.

If the Company is not admitted to the Official List and its Shares are not admitted to quotation within 3 months after the date of this Prospectus, the Company will not allot or issue any Shares, and will repay all Application Monies without interest as soon as practicable.

ASX takes no responsibility for the contents of this Prospectus. The fact that ASX may grant quotation of the Company’s Shares is not to be taken in any way as an indication of the merits of the Company or its Shares, including the Shares offered pursuant to this Prospectus.

2.13 RESTRICTED SECURITIES

Shares and Options issued to directors, promoters, vendors of classified assets, seed capital investors and others prior to the Offer may have escrow restrictions placed on them pursuant to the Listing Rules. Accordingly, a proportion of such securities, to be determined by ASX, may be required to be held in escrow for a period of time, as determined by ASX.

2.14 CHESS

The Company proposes to participate in CHESS, operated by ASX Settlement, a wholly-owned subsidiary of ASX, in accordance with the Listing Rules and the ASX Settlement Rules.

Under this system, the Company will not issue share certificates to investors. Instead, Shareholders will receive a statement of their holdings in the Company.

If an investor is broker-sponsored, ASX Settlement will send them a CHESS statement. The CHESS statement will set out the number of Shares allotted under the Prospectus and give details of their holder identification number, in the case of a holding on the broker-sponsored CHESS sub-register.

If an investor is issuer-sponsored, their holdings will be held on the issuer sponsored CHESS sub-register, and the issuer-sponsored statement issued will contain the number of Shares allotted under the Prospectus and the Shareholder’s security holder reference number.

A CHESS statement or issuer sponsored statement will routinely be sent to Shareholders at the end of any calendar month during which the balance of their holding changes. A Shareholder may request a statement at any other time, however a charge may be incurred for additional statements.

2.15 ENQUIRIES IN RELATION TO THE OFFER

This Prospectus provides information for potential investors in the Company and should be read in its entirety. If after reading this Prospectus, you have any questions about any aspect of an investment in the Company, please contact your stockbroker, accountant or independent financial adviser, or other professional advisers.

2.16 RISK FACTORS

Prospective investors in the Company should be aware that subscribing for Shares the subject of this Prospectus involves a number of risks. These risks are set out in Section 9 of this Prospectus and investors are urged to consider those risks (and if necessary, consult their professional adviser) before deciding whether to invest in the Company.

The risk factors set out in Section 9 of this Prospectus, and other general risks applicable to all investments in listed securities not specifically referred to in this Prospectus, may in the future affect the value of Shares. Accordingly, an investment in the Company should be considered speculative.

2.17 PRIVACY STATEMENT

If you complete an Application Form, you will be providing personal information to the Company (directly or through the Share Registry). The Company collects, holds and uses such information to assess your Application, to service your needs as a Shareholder and to facilitate distribution payments and corporate communications to you.

The information may also be used from time to time and disclosed to persons inspecting the register, bidders for your securities in the context of takeovers, regulatory bodies (including the Australian Taxation Office), authorised securities brokers, print service providers, mail houses and the Share Registry.

You can access, correct and update the personal information which is held about you. If you wish to do so please contact the Share Registry at the relevant contact numbers set out in this Prospectus.

Collection, maintenance and disclosure of certain personal information is governed by legislation including the Privacy Act 1988 (Cth) (as amended), the Corporations Act and certain rules such as the ASX Settlement Rules. You should note that if the information required on the Application Form is not provided, the Company may not be able to accept or process your Application.

For

per

sona

l use

onl

y

PROSPECTUS 15

SECTION 3 DIRECTORS AND MANAGEMENT

Mr David GriffithsNon-Executive Chairman (appointed September 2012)BBusMr Griffiths is a co-founder and non-executive director of Silver Lake Resources Limited.

A graduate from Western Australia’s Curtin University, Mr Griffiths has held a number of senior management roles during his more than thirty years in the resources industry, including strategic communications experience developing from an initial focus on human resources and employee relations to broader, group-wide strategic roles. Mr Griffiths has worked with Rio Tinto, Worsley Alumina, Metana Minerals and WMC Resources Ltd where he held the roles of Group Manager Employee Relations and General Manager Corporate Affairs and Community Relations for ten years before leaving to establish communications strategy and public relations company Gryphon Management Australia Pty Ltd (Gryphon Management) in 2004.

Gryphon Management administer communications plans, human resources strategies and corporate reputation plans for a wide range of resource based clients and other major entities both in Australia and in other countries including Africa and Brazil.

Mr David ChapmanManaging Director (appointed September 2012)BSc (Hons Geology) MAUSIMMMr Chapman brings over thirty years resource industry experience as a geologist in senior and executive management roles with WMC Resources Ltd and the junior sector within Australia and overseas. His experience covers operations, exploration project management and construction, business development and project financing.

Mr Chapman has spent about half of his professional career on exploration and project development in Brazil and is a fluent Portuguese speaker. He was a Director of WMC Resources Brazil office from 1991 to 2000 where he was responsible for exploration programs for gold and base metals throughout Brazil and French Guiana. More recently he was involved in the financing and construction of a significant base metal operation in Brazil. Through these activities he has developed a strong industry network within Brazil and South America.

Mr Jonathan KingTechnical Director (appointed September 2012)BSc (Hons Geology)Mr King is a geochemist with extensive exploration experience principally in base metal and gold in Australia. Mr King has been involved in the discovery of a number of gold deposits in Western Australia and more recently has been heavily involved in the development and successful marketing of opportunities in the resource sector to overseas investors.

Mr Luis Mauricio AzevedoNon-Executive Director (appointed September 2012)BSc Geology, LL.B, LL.MMr Azevedo is both a lawyer and geologist in Brazil, has over 30 years of experience in the mining industry, dealing primarily with gold, industrial minerals, copper and nickel. Mr Azevedo is a Partner of FFA Legal Support for Mining Co., and a Director and Chief Operating Officer of Talon Metals Corp. Previously, he worked as an attorney and geologist with WMC Resources Ltd and Barrick Gold Corp., based in Rio de Janeiro, Brazil. He holds a B.Sc. Geology (Universidade do Estado do Rio de Janeiro), an LL.B (Faculdade Integradas Candido Mendes), and an LL.M (Pontifice Universidade Catolica do Rio de Janeiro).

Mr Paulo Ilídio de BritoExploration ManagerBSc GeologyMr Brito is a geologist based in Brazil, has over 30 years of experience in the mining industry, dealing primarily with gold, copper, nickel and industrial minerals. Mr Brito is a Principal of consulting group Brasgeo and was until recently VP Exploration of Talon Metals Corp. Previously, he worked as a senior geologist with WMC Resources Ltd for 16 years until the closure of their activities in Brazil in 2002.

Mr Nicholas DayCompany SecretaryBCom, MBA, Finsia, ACPAMr Day has over 15 years’ experience in corporate finance and the resources industry. In addition to his financial and company secretarial skills he has experience in strategic planning, business development, mergers and acquisitions, bankable feasibility studies, and general management. Mr Day currently provides company secretarial services and corporate advice to Coventry Resources Limited, Black Range Minerals Limited and Ebooks Corporation. Previously he was CFO and Company Secretary of AIM & ASX listed mining company Albidon Ltd. Prior to this Mr Day was with Ernst & Young.

Ms Beverley NicholsChief Financial OfficerACSIS, ACSA, CPA, ACMAMs Nichols has over 20 years’ experience in accounting, taxation and management in the manufacturing and resource industries in both Australia and the UK. Ms Nichols holds the Company Secretary/Chief Financial Officer position with Birimian Gold Limited and Overland Resources Limited, as well as holding the position of Chief Financial Officer for a number of resources companies operating throughout Australia and Canada.F

or p

erso

nal u

se o

nly


SECTION 4 INDUSTRY OVERVIEW

4.1 BRAZIL

The Brazilian land surface spans a total area of about 8.5 million square kilometres, which makes it the fifth largest country in the world, a little larger than Australia and over half the area of South America. The prevailing climate is tropical, with temperate regions towards the south. The topography is mostly flat, with rolling lowlands in the north, some plains and a narrow coastal belt. The total population is about 191 million and literacy is about 86%. The official language is Portuguese, while English, Spanish and French are also spoken.

Brazil is now a federal presidential constitutional republic with presidential elections every four years. There are 26 States and a capital district of Brasilia. Major cities include São Paulo, Rio de Janeiro, Belo Horizonte and Salvador.

The Brazilian economy is large and diversified by almost any standard. There is still considerable state and semi-state participation in various strategic sectors, such as transport and utilities. Brazil has undergone several privatization programmes of state-owned companies and nearly all of the former state controlled companies are now in the private sector. The most important business sectors in Brazil are mineral and energy resources, agricultural, fisheries and forestry. There are several other sectors that have undergone expansion during the past few years such as manufacturing, high-tech industries, service industries, transport and communications.

Brazil is South America’s largest economy with a GDP of in the order of US$2.14 trillion at the end of 2010, GDP per capita was approximately US$12,594 in mid 2011, and unemployment was about 5.9% at September 2011. Brazil overtook the UK as the world’s 6th largest economy in 2011. It is a member of the World Trade Organisation (WTO), Mercosul, and the Latin American Integration Association (ALADI). There has been steady GDP growth of about 4.5% in the five years ending in 2011.

Brazil’s vast oil, considerable natural gas resources, and massive hydroelectric capabilities make Brazil one of the most energy self-sufficient countries in Latin America. The focus on power generation is likely to remain on hydro, but with a strong possibility of longer-term expansion of its nuclear capacity. Brazil is also at the forefront of renewable power projects such as biomass and wind power.

The 2014 Soccer World Cup and the Rio 2016 Summer Olympics are expected to positively impact economic growth with improvements in infrastructure and tourism

4.2 MINING INDUSTRY

Brazil’s mineral exports in 2011 totalled US$49.22 billion and are dominated by iron ore with gold, niobium (ferro-niobium) and copper. Brazil is the second largest exporter of tantalum aluminium and manganese and the third largest exporter of graphite. This represents 19% of all Brazil’s exports for 2011 and was the key factor in maintaining the trade balance in surplus for that year. Major export markets for minerals, particularly iron ore, are China, Japan and Germany. There was a 4.5% increase in mineral production over 2010 levels, and the sector employs in the order of 176,000 people.

The 1995 constitutional amendment provided a landmark in Brazilian mining legislation by granting foreign companies the right to hold majority ownership in Brazilian projects and equality of fiscal and economic treatment. Nowadays, numerous multi-national major and junior mining companies operate in Brazil.

Brazil has vast mineral resources including iron ore (for which it is the world largest exporter), copper, bauxite, gold, manganese, nickel, phosphates, platinum, tin, uranium, gas and petroleum. The Brazilian mining giant Vale S/A, is the world’s second largest miner and dominates the world class mineral provinces of the Iron Quadrangle and Carajás.

For

per

sona

l use

onl

y

PROSPECTUS 17

SECTION 5 COMPANY AND PROJECTS

5.1 PARINGA CORPORATE HISTORY

Paringa was incorporated in Australia on 27 February 2012 in accordance with the Corporations Act for the purposes of mineral exploration and development.

Paringa ResourcesLimited (Australia) 100%1 Paringa Mineracão

Limitada (Brazil)

Minaçu GoldProject2

São Luis GoldProject3

Santo Antônio dePadua Graphite

Project4

São Fidélis Graphite Project5

Notes:1. Paringa is the registered holder of 99.9% of the quotas in Paringa Brazil. The remaining 0.1% of quotas is held on trust for Paringa. Refer to Section 7

for further details.

2. The Minaçu Gold Project comprises three granted tenements. The tenements are held by Paringa Brazil. Refer to Section 7 for further details.

3. The São Luis Gold Project comprises 13 tenement applications. A mineral rights transfer agreement will be lodged with the DNPM once the applications are granted as applications are not transferable under Brazilian law. Refer to Section 7 for further details.

4. The Santo Antônio de Pádua Graphite Project comprises 12 tenement applications. The tenement applications are held by Paringa Brazil. Refer to Section 7 for further details.

5. The São Fidélis Graphite Project comprises two tenement applications. The tenement applications are held by Paringa Brazil. Refer to Section 7 for further details.

5.2 VISION AND STRATEGY

Paringa’s vision is to become a premium mineral exploration and development company through the exploration and exploitation of its gold and graphite assets in Brazil.

The Company’s primary objective will be to explore its Minaçu Gold Project located in central Brazil, approximately 280km north of Brasilia. The Minaçu Gold Project comprises three exploration licenses covering 59.4km² in a highly endowed region. Paringa has planned a two phase, two year exploration program with the goal of defining a significant high-margin gold resource.

In conjunction with its planned program at the Minaçu Gold Project, the Company will be generating a pipeline of priority targets at the São Luis Gold Project within the Proterozoic greenstone sequences in the (100Moz+ Au) Guyana Shield. Along with this the Company is exploring both the Santo Antônio de Pádua Graphite Project and the São Fidélis Graphite Project for short-term resource opportunities with the objective of creating a high-margin graphite project with low capital development requirements.

While the Company is focussed on building a sound resource base within the current portfolio, its secondary objective is to leverage off technical and commercial strengths in Brazil and pursue additional growth opportunities by investing in, and/or acquiring additional Au, Cu and strategic minerals resources projects to deliver shareholder value.

For

per

sona

l use

onl

y


5.3 TENEMENTS

Paringa has a number of tenements that are either granted or under application. A summary of its tenements are provided below.

Purpose

Mines Department

Reference Status Grant Date Expiry Date

Minaçu Gold Project 864.466/08 Granted 19/03/2012 19/03/2015



São Luis Gold Project 806.588/11 Application N/A N/A













Santo Antônio de Pádua Graphite Project 831.809/12 Application N/A N/A











For

per

sona

l use

onl

y

PROSPECTUS 19

Purpose

Mines Department

Reference Status Grant Date Expiry Date


São Fidélis Graphite Project 890.400/12 Application N/A N/A

São Fidélis Graphite Project 890.401/12 Application N/A N/A

The National Department of Mineral Production (DNPM) does not have a time limit to grant the respective Exploration Permits for the tenements which are still applications.

5.4 PROJECT LOCATIONS

Paringa’s Projects are located in areas of strong mineral endowment and are close to infrastructure to minimise future development and operating costs (Figure 1).

Figure 1: Paringa Project Locations

For

per

sona

l use

onl

y


5.5 PROJECTS

5.5.1 Minaçu Gold ProjectThe Minaçu Gold Project is 100% owned by Paringa Brazil. The project is located on the border of Goiás and Tocantins states in central Brazil, approximately 280km north of Brasília (Figure 2). The Minaçu Gold Project comprises three exploration licenses covering 59.43km². The two core exploration licenses covering the project area are 864.466/2008 and 864.508/2010 (Figure 3). On June 2012, Paringa Brazil acquired the mineral rights. Two of the exploration licenses have already been transferred to Paringa Brazil and the third is in the process of being transferred to Paringa Brazil. A summary of the acquisition agreement is set out in Section 7.

The Minaçu Gold Project is located within the Brasília Fold Belt, which developed between the Amazon and São Francisco cratons. Within the project area, the belt comprises Proterozoic metasedimentary rocks which host significant gold mineralisation, including the 20.6Moz Morro de Ouro/Paracatu (Kinross Gold Corporation), Aurumina (Toniollo, Busnello S/A) and Cavalcante (Empresa Sul-Americana de Montagens S/A) mines and several gold occurrences, such as Rio do Carmo, Fartura and Santo Antônio.

The Minaçu Gold Project includes several historical gold workings from which approximately 120,000oz were mined at a premium grade by artisanal miners in the 1980’s and 1990’s. The area was originally discovered and mined at surface and underground historically by Portuguese prospectors (Bandeirantes). Channel sampling by the previous operator completed in and around these workings returned values such as 4m @ 29.2g/t Au, and 1.6m @ 11.3g/t Au. A former operator obtained 8.64g/t Au over a 2.0m interval in an underground shaft, and sampled sulphide-rich veins with best intersections including 3m @ 31.35g/t Au and 10m @ 19.64g/t Au. Artisanal miners (Garimpeiros) currently exploit some of these workings on a very small scale.

Three main mineralized trends have been identified (Figure 4), with almost continuous mineralisation along them. The eastern zone comprises the Mangabeira occurrences. The central zone comprises the Buracão, Homero, Tincheirão, Dedê and Piscina occurrences which extend over a strike length of approximately 2km. The western zone comprises the Planta, Delegado, Irmãos Coragem, Zé Rosa and Imbira Branca occurrences. Imbira Branca was mined extensively underground by the Bandeirantes and later at surface by the Garimpeiros.

Gold mineralisation is associated with shear zones and stockworks in competent quartzite units, or with shallowly-dipping quartz veins associated with sulphide-rich carbonate-graphite-manganese oxide alteration.

Based on the known gold occurrences the potential is for narrow vein high grade gold mineralisation (Figure 5). Additional targets to those already identified by historical miners and explorers are down dip and along strike from known workings, parallel to known trends and in the follow up of stream sediment, soil anomalies and additional historical workings in the west of the project area.

A two-phase exploration programme over two years has been proposed, comprising detailed geological and structural mapping with surface sampling and trenching, orientation soil and stream-sediment geochemical surveys, and diamond drilling in Year 1, followed by further diamond drilling in Year 2 to delineate mineral resources and metallurgical test work, depending on results from Year 1.

For

per

sona

l use

onl

y

PROSPECTUS 21

Figure 2: Minaçu Gold Project Location and Proximity to Major Cities

For

per

sona

l use

onl

y


Figure 3: Minaçu Gold Project Exploration Licenses and Regional Geology

For

per

sona

l use

onl

y

PROSPECTUS 23

Figure 4: Minacu Gold Project Surface Workings and Mineralised Trends

For

per

sona

l use

onl

y


Figure 5: Trincheirão Prospect Workings Looking NNE

For

per

sona

l use

onl

y

PROSPECTUS 25

5.5.2 São Luis Gold ProjectThe São Luis Gold Project is located on the border of Pará and Maranhão States in northern Brazil, about 250km east of Belém and comprises 13 exploration license applications in seven blocks covering 1,252km². On 13 August 2012, Paringa Brazil signed an agreement to acquire a 100% interest in the project from Brazil Americas Investments & Participation Mineração Ltda. A summary of the acquisition agreement is set out in Section 7.

The project area lies within the São Luis Craton which is the southeast end of the highly endowed Guyana Shield, and also a remnant fragment of the West African Craton following the Mesozoic break-up of the Pangea paleocontinent (Figure 6). Both the Guyana Shield and West Africa Craton host multi-million ounce gold deposits. In the Guyana Shield which has a known gold endowment of over 100Moz; Las Cristinas (27Moz), Choco 10 (11.1Moz), Rosebel (14.9Moz), Omai (5.2Moz) and Aurora (5.1Moz) are good examples of world-class gold deposits in a similar geological environment to the São Luis Craton.

Current known gold resources in the São Luis Craton total over 6Moz in several deposits, including Piaba-Tatajuba (3.2Moz), Cipoeiro (1.8Moz), Cachoeira (0.7Moz) and Chega Tudo (0.6Moz). Scarce outcrop limited mainly to historic artisanal gold workings, together with poor infrastructure and poor quality regional geophysics ensured that the district did not benefit from modern exploration prior to the mid 2000’s.

Figure 6: São Luis Gold Project Location with Guyana Shield and West African Craton

In 2008 a new high-resolution airborne magnetic survey that covered part of the São Luis Craton was released. The current boundaries of the overlying sediments, which limited the area of the Proterozoic granite greenstones, had been interpreted from older, more regional aeromagnetic data. The new, high resolution aeromagnetic survey has enabled reinterpretation of these boundaries by Paringa, which has increased the potential area of granite greenstones. The new aeromagnetic survery was used by Paringa to delineate seven regional exploration targets (Figure 7).

The São Luis Gold Project represents an early-stage opportunity located in a prospective geological/structural environment with known gold mineralisation at the southeast end of the Guyana Shield. The Paringa tenements cover a significant strike length of areas of high magnetic relief interpreted to be Proterozoic granite-greenstone outlined recently in high resolution aeromagnetic imagery, and overlie the interpreted extension to structures associated with major gold deposits and occurrences. The target areas are similar to those which host other gold deposits within the São Luis Craton and the broader Guyana Shield and West African Craton and therefore can be considered prospective for major gold deposits.

For

per

sona

l use

onl

y


Source: Paringa Resources Ltd

Figure 7: São Luis Gold Project Targets over Magnetic Image and Structural Trends

Paringa intends to carry out a progressive two-phase exploration programme. Geological reconnaissance, rock sampling and regional stream-sediment sampling, soil sampling, ground magnetic and IP surveys, and auger drilling in areas of thin cover will be carried out, together with about 1,500m of diamond drilling.

5.5.3 Santo Antônio de Pádua Graphite ProjectThe Santo Antônio de Pádua Graphite Project is 100% owned by Paringa Brazil. The project is located in Rio de Janeiro State, about 185km northeast of Rio de Janeiro city and comprises 12 exploration license applications covering 224.6km².

The Santo Antônio de Pádua Graphite Project lies within the coastal Mantiqueira Province, a highly complex structural zone which hosts all of Brazil’s current graphite-producing operations (Figure 8).F

or p

erso

nal u

se o

nly

PROSPECTUS 27

(after Suszczynski, 1975)

Figure 8: Graphite and Manganese Belts in Mantequeira Province SE Brazil

For

per

sona

l use

onl

y


Literature searches and geological reconnaissance by Paringa confirm the presence of previously documented graphite occurrences in lenses hosted by the Andrelândia Group gneissic belt. In general, individual graphite-bearing lenses range from 1-3m, but may form zones up to 15m wide. The graphitic bodies dip about 50°- 60° southeast and, where disseminated, the graphite occurs as fine-grained flakes. Paringa’s 65km-long tenement applications are interpreted to cover at least a 60km strike of the prospective Andrelândia Group (Figures 9 and 10).

In July 2012, Paringa carried out geological reconnaissance in two sectors of the project. This included the collection of 18 rock-chip samples for chemical analysis. Assays indicated that total carbon contents range from 3.14%C to >15.0%C in eight of the samples. Currently, the Santo Antônio de Pádua Graphite Project is at an early stage but indications are that there is good potential for locating flake graphite in high-tonnage, low-grade disseminated mineralisation and in vein-type high-grade crystalline lump and/or flake mineralisation (Figure 10).

A two-phase exploration programme has been proposed. In Year 1, exploration will include geological mapping to understand the structural control and better delineate the distribution of the mineralised horizons, preliminary petrography to characterise lithologies and the nature of graphite mineralisation, and trenching to sample mineralised horizons. Depending upon the results obtained in Year 1, Year 2 exploration would comprise preliminary metallurgical test work, an induced polarisation survey to determine dimensions of mineralised bodies, and an initial diamond drilling programme.

Figure 9: Santo Antônio de Pádua Exploration License Applications

For

per

sona

l use

onl

y

PROSPECTUS 29

Source: CPRM and Paringa Resources Ltd

Figure 10: Santo Antônio de Pádua Graphite Project Prospective Stratigraphy and C% Assays from Reconnaissance Sampling

5.5.4 São Fidélis Graphite ProjectThe São Fidélis Graphite Project is 100% owned by Paringa Brazil. The project is located in northern Rio de Janeiro State, about 190km east northeast of Rio de Janeiro city. São Fidélis comprises two exploration license applications covering 35.91km².

The São Fidélis region produced very high grade and quality graphite during the two world wars from the three inactive graphite mines located within the Paringa tenement applications. The grades mined from the Saudade mine were between 35%C and 40%C with more selective production in the range 60%C to 70%C.

Graphite mineralisation is associated with graphite schists and graphite-bearing gneisses belonging to the São Fidélis Group. According to the Brazilian Geological Survey (CPRM), there are four inactive graphite mines (Saudade, São Benedito and Serra do Colégio 1 and 2) and two graphite occurrences in the region. Three of the inactive mines (Saudade, São Benedito and Serra do Colégio 1), and one known occurrence lie within Paringa´s tenements (Figure 11). The São Fidélis Graphite Project is an early-stage project currently with limited available information; however, the presence of abandoned graphite mines and the historical information about the good quality of the graphite make the project attractive.

For

per

sona

l use

onl

y


Assuming the applications are granted, the proposed exploration programme can be divided into two phases. Year 1 will comprise: geological and structural mapping, together with rock-chip sampling, preliminary petrography, and trenching to sample mineralised zones. In Year 2, preliminary metallurgical test work, an induced polarisation survey and diamond drilling will be carried out.

Source: Carta Geológica 1:100,000 Folha São Fidélis, CPRM

Figure 11: São Fídelis Graphite Project Historical Mines and Prospects

More details of the Projects are included in the Independent Geologist’s Report in Section 6.

For

per

sona

l use

onl

y

PROSPECTUS 31

5.6 WORK PROGRAM AND EXPENDITURE

The Company’s aim is to progress the exploration and development of the Projects by undertaking further drilling and studies.

The Company’s proposed work program and related expenditure is as follows:

Figure 12: Paringa Project Budget and Schedule

The above budget will be subject to review on an ongoing basis depending on the results obtained from the project areas. The Board considers the proposed budget is reasonable having regard to the stated objectives of the Company in Section 1.5. However, in the event that circumstances change or other better opportunities arise, the Directors reserve the right to vary the proposed uses to maximise the benefit to Shareholders.

For

per

sona

l use

onl

y


Independent Geologist's Report

Paringa Resources Ltd

Paringa Resources IGR

MINEWPER01035AA

SECTION 6 INDEPENDENT GEOLOGIST’S REPORTF

or p

erso

nal u

se o

nly

PROSPECTUS 33

MINEWPER01035AA

Coffey Mining Pty Ltd ABN 52 065 481 209 1162 Hay Street, West Perth WA 6005 Australia PO Box 1671, West Perth WA 6872 Australia T (+61) (8) 9324 8800 F (+61) (8) 9324 8877 coffey.com

25 September 2012

The Directors Paringa Resources Ltd Level 3, Suite 4, South Shore Centre 85 South Perth Esplanade SOUTH PERTH, WA 6151 Dear Sirs

Coffey Mining Pty Ltd (“Coffey Mining”) has been commissioned by Paringa Resources Ltd (“Paringa”) to provide an Independent Geologist's Report (“IGR”) for Paringa, incorporating Paringa’s mineral properties prospective for gold-and graphite in Brazil. The IGR has been prepared on information available up to and including 31st August 2012. This document has been prepared for inclusion in a prospectus to be prepared by Paringa and lodged with ASIC in early October 2012. The nature of the issue is 33,333,333 million shares at 0.30¢ each to raise a total of approximately $10M.

At the request of Paringa, a review and appraisal of the exploration potential of Minaçu Gold Project, São Luis Gold Project, Santo Antônio de Pádua and São Fidélis Graphite Projects have been carried out by Coffey Mining. The Minaçu Gold Project is located in the southern region of Tocantins State, central Brazil and represents an advanced-stage exploration property where current and previous artisanal mining, university research and exploration by junior companies have identified multiple gold+copper occurrences. The São Luis Gold Project is located in Maranhão State, Brazil and represents an early-stage exploration gold property targeting magnetic and lithostructural targets within prospective Proterozoic granite-greenstone terrains outlined recently in high resolution aeromagnetic imagery flown over the margins of the São Luis Craton. This Craton is interpreted to be a fragment of the West African Craton following the Mesozoic break-up of Pangea. The Santo Antônio de Pádua and São Fidelis Graphite Projects are early-stage graphite exploration properties located in Rio de Janeiro State, Brazil, with historical graphite mines and where university research has identified several other graphite and manganese occurrences.

The legal status of the assets in which Paringa has an interest, the various agreements covering those interests, and the exploration, mining and minerals processing legislation applicable in Brazil have not been independently verified by Coffey Mining. The present status of tenements, agreements and legislation described in this report is based on information provided by Paringa and its solicitors, and the report has been prepared on the assumption that exploration and potential development of the Projects will prove to be lawfully allowable.

Coffey Mining has based its review of the Projects on information provided by Paringa, along with technical reports prepared by government agencies, independent consultants, and other relevant published and unpublished data. A site visit was undertaken to the Minaçu Gold Project and Santo Antônio de Pádua Graphite Project by Mr Leonardo de Moraes Soares, Senior Geologist with Coffey Mining Brazil between August 15th and 19th, 2012. Coffey Mining has endeavoured, by making all reasonable enquiries, to confirm the authenticity and completeness of the technical data upon which the Independent Geologist’s Report is based. A final draft of this report was also provided to Paringa, along with a written request to identify any material errors or omissions.

For

per

sona

l use

onl

y


Paringa Resources IGR – MINEWPER01035AA 2 Independent Geologist's Report – 25 September 2012

Paringa has provided exploration programmes and budgets totalling $7.949M over two years to advance the Projects. Coffey Mining considers that the proposed exploration programmes and budgets are appropriate given the prospectivity of the Projects. The budgets are sufficient to achieve the stated objectives and satisfy the expenditure requirements. Paringa intends to raise approximately $10M, of which at least half of the liquid assets held or the funds proposed to be raised by Paringa are understood to be committed to the exploration, development and administration of the Projects, satisfying the requirements of ASX Listing Rules 1.3.2(b) and 1.3.3(b). The proposed exploration budgets are also sufficient to meet the anticipated minimum annual statutory expenditure commitments on the Project tenements.

Coffey Mining is an exploration, mining and resource consulting firm, which has been providing services and advice to the international mineral industry and financial institutions for over 50 years. The primary author of this report is Dr Marian Skwarnecki. Dr Skwarnecki is a professional geologist and geochemist with 22 years experience in exploration and evaluation of mineral properties in Australia and overseas, is a Senior Consulting Geologist with Coffey and is a Registered Professional Geoscientist (RPGeo) of the Australian Institute of Geoscientists (AIG). Mr Leonardo Soares, from Coffey Mining’s Belo Horizonte office, undertook the site visit to the Minaçu Gold Project on 15th-17th August, 2012 and to the Santo Antônio de Pádua Graphite Project on 18th-19th August, 2012; Mr Soares is a Member of the Australian Institute of Geoscientists (MAIG).

Each of the authors has the appropriate relevant qualifications, experience, competence and independence to be considered an “Expert” or “Specialist” under the definitions provided in the VALMIN Code and as “Competent Person” under the definition provided in the JORC Code.

Neither Coffey Mining, nor the authors of this report have, or have had previously, any material interest in Paringa or the mineral properties or companies in which Paringa has, or is earning, an interest. Our relationship with Paringa is solely one of professional association between client and independent consultant. This report is prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this report.

Coffey is not in a position to make direct comment on any interest the directors and promoters of Paringa may have in the company or its assets, nor is Coffey qualified to comment on or confirm this aspect.

For and on behalf of Coffey Mining Pty Ltd

This is a scanned signature held on file by Coffey Mining. The person and signatory consents to its use only for the purpose of this document.

Dr Marian Skwarnecki Senior Consultant - Geology & Geochemistry

ThisThThhThThiThiThhThihhThhhThhThh is is is is iisiisssi a sca sca sca sca sca ssa sca sca sca sca sca saa sca ssa sccaa sccaa sa sca anneaaaaaa d siiiiiiigngngnatgngngnggngngngggnggnngnggn ure hMiniMiniMiniMiniMiniMiniiMiMiniMiMiMMMMMMMiMMM ng.ng.ng.ng. ng. . . ng. ng. ngng. ngg. ngg. nng g heTheTheTheTheTheTheThTheThehehehehhhehheTheheehheehhehehee pperperperperperperperperperpepepeppepepepeppepeepepepperson sonsonsononnnnsonsonnnsonnnonsonooo andananaaaaaaaaaaaannnnnn signuse useuseuse useuseuseuseuseuseusususeuseeuseeeuusesususe us onlyonlyonlyonlyonlylonllynlylyononnononlnnononnnon fofofofofoforforfooofofofoooofoofofoofofofofofooofoo thehhhh purururururururururururrururrrrrrposeposeposeposepposeseseseseseseeep eeeeposeposeee of th

Dr DrDrDDDDrDrDrDrDrDrDrDrrD MMMMMMarMMMMMMMM ian Skwarnecki

For

per

sona

l use

onl

y

PROSPECTUS 35

Coffey Mining Pty Ltd

DOCUMENT INFORMATION

Paringa Resources IGR – MINEWPER01035AA Independent Geologist's Report – 25 September 2012

Author(s): Marian Skwarnecki Senior Consultant – Geology & Geochemistry Ph.D, RPGeo

Date: 25 September 2012

Project Number: MINEWPER01035AA

Version / Status: Final

Path & File Name: \\wperfs01.corp.coffey.com.au\data$\MINE\Projects\Paringa Resources Pty Ltd\MINEWPER01035AA_Brazillian Projects IGR\Report\CMWPr_1035AA_Paringa_IGR_Aug2012_Final.docx

Print Date: Monday, 15 October 2012

Copies: Paringa Resources Ltd (1) electronic

Coffey Mining – Perth (1)

Document Change Control

Version Description (section(s) amended) Author(s) Date

Document Review and Sign Off



Primary Author Dr Marian Skwarnecki

Supervising Principal Paul Mazzoni

ThisThihhThiThiThihiThiiThiThiThThiiT iThi iis is iissis isiisii a sca sca scsca scsca sss anned siii ngngnatgngggngngnggngngngnngnngnnggngngngn ure heMiniMiniMiniMiMinMinMiniMiniMMiMMiM nnnMinMinnMMinMinMin ng.ng.ng.ng.ng.ng.ng.ng.nng.n TheTheTheTheheheTheTheThehehhhheheTheheThehhehhehehheeeThehheheh perperperperperperpperperperpereererppp sonnnnnnnnss and ananannanaanaannn signuse useusseuseuseusesuseuseuseeessseeussse sseese onlyonlyonlyonlylonlyonlyonlylonlyllonlyonlylonlyo forforforforooroorfororoororoffoororfforforfforoooffooo thetheththththethethhhthththethtttthhehth purpururururururururu posepospposeposeposeseseseposeposeppposeeeep of th

PriPriPrPrPrPrPrPrPPrPrrPriPrrPrPriPriP marmaaaaamammaaaaamammmmmmmm y AuthorS

This is a scanned signMiniMMiniMinMinMiMiniMinMinMinMinMMMM ng. ngngngnnggngngnnnng TheTheThehTheTheThheeeeeh perperrrrrerrrssons ause useuseusessuse onlyonlyonlyonononon yonnnlnlyon forforrfororoffforffforofo thethetheehetheeheehhtthehhthee purp

Supervisiisiisiisiisiisiississsss ngngnggnggngnnggngng PPPPriPP ncipPaul Mazzoni

For

per

sona

l use

onl

y




Table of Contents

EXECUTIVE SUMMARY ...........................................................................................................................i

1 Introduction ..................................................................................................................................1 1.1 Terms of Reference ................................................................................................................. 1 1.2 Qualifications, Experience and Independence ........................................................................ 2 1.3 Principal Sources of Information .............................................................................................. 3

2 Country Background ....................................................................................................................4 2.1 History and Current Status ...................................................................................................... 4 2.2 Geography, Climate and Infrastructure ................................................................................... 5

2.2.1 Geography ......................................................................................................................5 2.2.2 Climate ...........................................................................................................................5 2.2.3 Infrastructure ..................................................................................................................6

2.3 Brazilian Mining Legislation ..................................................................................................... 6 2.3.1 Mineral Tenure ...............................................................................................................6 2.3.2 Brazilian Environmental Legislation ................................................................................8

3 Regional Geology and Mineralisation ..................................................................................... 10

4 Minaçu Gold Project .................................................................................................................. 12 4.1 Location ................................................................................................................................. 12 4.2 Mineral Tenure ...................................................................................................................... 13 4.3 Geology and Mineralisation ................................................................................................... 16

4.3.1 Regional Geology ......................................................................................................... 16 4.3.2 Geology of the Project Area ......................................................................................... 18 4.3.3 Alteration ...................................................................................................................... 20

4.4 Exploration History ................................................................................................................ 23 4.5 Historical Exploration Results ................................................................................................ 24

4.5.1 Heavy Mineral Pan Concentrate (HMC) Survey ........................................................... 24 4.5.2 Stream-Sediment Sampling .......................................................................................... 24 4.5.3 Soil Sampling ............................................................................................................... 24 4.5.4 Induced Polarisation (IP) and Ground Magnetic Surveys ............................................. 24 4.5.5 Drilling .......................................................................................................................... 27

4.6 Major Prospects ..................................................................................................................... 29 4.6.1 Buracão ........................................................................................................................ 29 4.6.2 Trincheirão ................................................................................................................... 32 4.6.3 Mangabeira .................................................................................................................. 32 4.6.4 Piscina .......................................................................................................................... 35 4.6.5 Planta ........................................................................................................................... 37 4.6.6 Other Gold Occurrences ............................................................................................... 37

4.7 Exploration Potential .............................................................................................................. 39 4.8 Proposed Exploration Programme and Budget ..................................................................... 39 4.9 Coffey Mining Conclusions and Recommendations .............................................................. 40

5 São Luis Gold Project ............................................................................................................... 41 5.1 Location ................................................................................................................................. 41 5.2 Mineral Tenure ...................................................................................................................... 42 F

or p

erso

nal u

se o

nly

PROSPECTUS 37



5.3 Geology and Mineralisation ................................................................................................... 44 5.3.1 Regional Geology ......................................................................................................... 44 5.3.2 Mineralisation ............................................................................................................... 46

5.4 Exploration History ................................................................................................................ 46 5.5 Exploration Potential .............................................................................................................. 47 5.6 Proposed Exploration Programmes and Budget ................................................................... 48 5.7 Coffey Mining Conclusions and Recommendations .............................................................. 49

6 Santo Antônio de Pádua Graphite Project .............................................................................. 50 6.1 Location ................................................................................................................................. 50 6.2 Mineral Tenure ...................................................................................................................... 51 6.3 Geology and Mineralisation ................................................................................................... 51

6.3.1 Regional Geology ......................................................................................................... 51 6.3.2 Geology of the Project Area ......................................................................................... 54 6.3.3 Graphite Mineralisation ................................................................................................. 56

6.4 Exploration History ................................................................................................................ 56 6.5 Exploration Potential .............................................................................................................. 59 6.6 Proposed Exploration Programmes and Budgets ................................................................. 60 6.7 Coffey Mining Conclusions and Recommendations .............................................................. 61

7 São Fidélis Graphite Project .................................................................................................... 62 7.1 Location ................................................................................................................................. 62 7.2 Mineral Tenure ...................................................................................................................... 63 7.3 Geology and Mineralisation ................................................................................................... 63

7.3.1 Regional Geology ......................................................................................................... 63 7.3.2 Geology of the Project Area ......................................................................................... 66 7.3.3 Graphite Mineralisation ................................................................................................. 66

7.4 Exploration and Exploitation History ...................................................................................... 68 7.5 Exploration Potential .............................................................................................................. 68 7.6 Proposed Exploration Programme and Budget ..................................................................... 68 7.7 Coffey Mining Conclusions and Recommendations .............................................................. 69

8 Alternate Application of Funds ................................................................................................ 70

9 Principal Sources of Information ............................................................................................. 71

10 Glossary ..................................................................................................................................... 75

For

per

sona

l use

onl

y




List of Figures Figure 1 – Paringa Project Locations ii Figure 1.1_1 – Project Locations 2 Figure 3.1_1 – Simplified Geological Map of Brazil 10 Figure 4.1_1 – Minaçu Gold Project - Location 12 Figure 4.2_1 – Minaçu Gold Project - Tenement Map 15 Figure 4.3.1_1 – Gold Occurrences in the Brasília Fold Belt 16 Figure 4.3.1_2 – Regional Geology of the Minaçu Gold Project 17 Figure 4.3.2_1 – Known Gold Occurrences - Minaçu Gold Project 19 Figure 4.3.2_2 – Minaçu Gold Project - Type 1 Mineralisation Styles 21 Figure 4.3.3_3 – Minaçu Gold Project - Type 2 Mineralisation Styles 22 Figure 4.5.3_1 – Minaçu Gold Project - Gold (ppb) in Soils 25 Figure 4.5.4_1 – Minaçu Gold Project - Principal IP Anomalies 26 Figure 4.5.5_1 – Minaçu Gold Project - Location of Diamond Holes Drilled in 2006-2007 28 Figure 4.6.1_1 – Minaçu Gold Project - Mineralised White Quartz Vein with Goethite (after Sulphides). Buracão Prospect 29 Figure 4.6.1_2 – Buracão Prospect - Rock Sampling and Assays 30 Figure 4.6.1_3 – Buracão Prospect - Geological Map, Drillhole Locations and Rock-Chips 31 Figure 4.6.3_1 – Trincheirão Prospect - General View of the Old Workings 33 Figure 4.6.3_1 – Trincheirão Prospect - Geological Map, Drillhole Locations and Rock-Chips 34 Figure 4.6.4_1 – Mangabeira Prospect - Geological Map, Drillhole Locations and Rock-Chips 36 Figure 5.1_1 – São Luis Gold Project - Location 41 Figure 5.2_1 – São Luis Gold Project - Tenement Map 42 Figure 5.3.1_1 – São Luis Gold Project - Regional Geology 45 Figure 5.4_1 – São Luis Gold Project - Structural Interpretation from Regional Aeromagnetic Data 46 Figure 5.3.2_1 – Reconstruction of Pangea Paleocontinent showing Major Gold Deposits in relation to the São Luis Gold

Project 46 Figure 5.5_1 – São Luis Gold Project - Structural Interpretation from Regional Aeromagnetic Data 47 Figure 6.1_1 – Santo Antônio de Pádua Graphite Project - Location 50 Figure 6.2_1 – Santo Antônio de Pádua Graphite Project - Tenement Map 53 Figure 6.3.1_1 – Tectonic-Magmatic Domains of Rio de Janeiro State and Adjacent Areas 54 Figure 6.3.2_1 – Local Geology of Santo Antônio de Pádua Graphite Project showing Graphite Occurrences 55 Figure 6.3.3_1 – Main Manganese and Graphite Belts in Southeastern Brazil 57 Figure 6.3.3_2 – Santo Antônio de Pádua Graphite Project - Lithologies 58 Figure 6.4_1 – Santo Antônio de Pádua Graphite Project - Carbon (%) Assays from Reconnaissance Sampling 59 Figure 7.1_1 – São Fidélis Graphite Project - Location 62 Figure 7.2_1 – São Fidélis Graphite Project - Tenement Map 65 Figure 7.3.2_1 – São Fidélis Graphite Project - Local Geology 67

F

or p

erso

nal u

se o

nly

PROSPECTUS 39



List of Tables Table 2.3.2_1 – Main Environmental Licensing Stages of Brazilian Mining Projects 9 Table 4.2_1 – Minaçu Gold Project - Tenement Summary 14 Table 4.5.5_1 – Minaçu Gold Project - Best Diamond Drill Intersections 27 Table 4.6.3_1 – Minaçu Gold Project - Gold Grades >5g/t – Rock Channel Sampling at Trincheirão 33 Table 4.6.5_1 – Minaçu Gold Project - Gold Grades >5g/t –Rock-Chip and Grab Sampling at Planta 37 Table 4.6.6_1 – Minaçu Gold Project - Rock-Chip and Grab Sampling at Imbira Branca 38 Table 4.8_1 – Minaçu Gold Project - Proposed Exploration and Evaluation Expenditure 40 Table 5.2_1 – São Luis Gold Project - Mineral Tenement Summary 43 Table 5.6.2_1 – São Luis Gold Project - Proposed Exploration and Evaluation Expenditure 48 Table 6.2_1 – Santo Antônio de Pádua Graphite Project - Tenement Summary 52 Table 6.6.2_1 – Santo Antônio de Pádua Graphite Project - Proposed Exploration and Evaluation Expenditure 60 Table 7.2_1 – São Fidélis Graphite Project - Tenement Summary 64 Table 7.6.2_1 – São Fidélis Graphite Project - Proposed Exploration and Evaluation Expenditure 69

For

per

sona

l use

onl

y



Paringa Resources IGR – MINEWPER01035AA Page: i Independent Geologist's Report – 25 September 2012

EXECUTIVE SUMMARY

Paringa Resources Ltd (“Paringa”) has commissioned Coffey Mining Pty Ltd (“Coffey Mining”) to prepare an Independent Geologist’s Report (IGR) on four gold and graphite projects in Brazil (Figure 1). Paringa’s projects comprise 39.95km² of granted tenements and 1,512.49km² of tenements under application. The Minaçu Gold Project is located on the border of Tocantins and Goiás States, central Brazil, and represents an advanced-stage exploration property where current and previous artisanal mining, university research and exploration by junior companies has identified multiple gold occurrences. The São Luis Gold Project is located on the border of Maranhão and Pará states, northern Brazil. It contains early-stage magnetic and lithostructural exploration targets within a Proterozoic granite-greenstone region with significant gold endowment and an extension of Guyana Shield and the West African craton geology. The Santo Antônio de Pádua Graphite Project is an early-stage graphite project located in Rio de Janeiro State, southeast Brazil, where university research has identified additional graphite and manganese occurrences to those known from the Geological Survey mineral occurrence database and exploitation of manganese, along at least 60km of prospective stratigraphy, during WW1. The São Fidélis Graphite Project has seen no systematic recent exploration, although abandoned graphite mines within the project area reportedly produced very high grade and quality graphite during the two World Wars.

Country Background

Brazil has a total area of approximately 8.5 million km². The prevailing climate is tropical, with temperate regions towards the south. The topography is mostly flat, with rolling lowlands in the north, some plains and a narrow coastal belt. The total population is about 197 million and the literacy rate is about 86%. The political environment in Brazil is generally stable. Brazil has been a member of the World Trade Organisation since 1995 and is a founding member of Mercosul, a trade liberalisation programme for the South American continent.

Regional Geology and Mineralisation

The geological history of Brazil spans Precambrian to Holocene rocks. The Precambrian is marked by great tectonic mobility with alternating compressive and extensional events. These tectonic events resulted in a mosaic of Archean cratonic fragments surrounded by Proterozoic mobile belts. The craton fragments and Early Proterozoic mobile belts are generally covered by later Proterozoic sedimentary and volcanic rocks. In the Phanerozoic, wide intracratonic basins developed after the Ordovician and were accentuated by narrow rift-type basins in the Jurassic and Cretaceous during opening of the Atlantic Ocean. Mesozoic and Cenozoic marginal basins border Brazil along the Atlantic coast.

Brazil's natural resources include a large array of metallic deposits (Al, Au, Ba, Co, Cr, Cu, Fe, Mg, Mn, Mo, Nb, Ni, Pb, PGE, Sn, Ta, Ti, U, V, W, Zn, Zr), and precious and semi-precious gemstones (amethyst, beryl, diamond, emerald, topaz, tourmaline). The best-known metallic provinces (Quadrilátero Ferrífero and Carajas) contain world-class gold and iron deposits. Gold and banded iron-formation in the Quadrilátero Ferrífero have been the foundation for Brazilian mining for more than two centuries. In contrast, relatively recent discoveries (last few decades) of iron, gold, copper, and manganese in the Carajas region - including the world's largest iron ore deposits - have reinforced Brazil's role as a major world supplier of metals. F

or p

erso

nal u

se o

nly

PROSPECTUS 41


Paringa Resources IGR – MINEWPER01035AA Page: ii Independent Geologist's Report – 25 September 2012

Figure 1 Paringa Project Locations

Minaçu Gold Project

The Minaçu Gold Project is 100%-owned by Paringa Mineração Ltda (“Paringa Brazil”), a wholly owned subsidiary of Paringa. The project is located on the border of Goiás and Tocantins states in central Brazil, approximately 280km north of Brasília, and comprises three exploration licenses covering 59.43km². In June 2012, Paringa Brazil acquired the mineral rights. Two of the licenses have already been transferred to Paringa Brazil and transfer of the final license is pending.

The Minaçu Gold Project is located within the Brasília Fold Belt, which developed between the Amazon and São Francisco cratons. Within the project area, the belt comprises metasedimentary rocks of the Arai (Paleoproterozoic) and Paranoa (Mesoproterozoic) Groups which host significant gold mineralisation, including the 20.6 Moz Morro do Ouro/Paracatu (Kinross Gold Corporation), Aurumina (Toniollo, Busnello S/A) and Cavalcante (Empresa Sul-Americana de Montagens S/A) mines and several gold occurrences, such as Rio do Carmo, Fartura and Santo Antônio.

For

per

sona

l use

onl

y



Paringa Resources IGR – MINEWPER01035AA Page: iii Independent Geologist's Report – 25 September 2012

The Minaçu Gold Project includes several historical gold workings, which produced approximately 120,000oz of gold during the 1980’s and 1990’s. Channel sampling by the previous explorers completed in and around these workings returned values up to 4m @ 29.2g/t Au, 1.6m @ 11.3g/t Au, 2m @8.64g/t Au, 3m @ 31.35g/t Au and 10m @ 19.64g/t Au in surface and underground workings. “Garimpeiros” (artisanal miners) currently exploit some of these workings.

Three main NNE-trending mineralized zones have been identified, with almost continuous mineralisation along them. The eastern zone comprises the Mangabeira occurrences. The central zone comprises the Buracão, Homero, Tincheirão, Dedê and Piscina occurrences. The western zone comprises the Planta, Delegado, Irmãos Coragem, Zé Rosa and Imbira Branca occurrences.

Gold mineralisation is associated with shear zones and stockworks in competent quartzite units, or with shallowly-dipping quartz veins associated with sulphide-rich carbonate-graphite-manganese oxide alteration.

The exploration potential of the Minaçu Gold Project for high-grade, narrow vein gold mineralisation is based on the existence of gold occurrences and deposits, some with active mining, regional geological features, gold anomalies, presence of gossanous material and quartz veins. Based on the knowledge of known gold mineralisation and litho-structural features identified within the property, generation of new targets and future discoveries may result from systematic exploration.

A two-phase exploration programme over two years has been proposed, comprising detailed geological and structural mapping with surface sampling and trenching, orientation soil and stream-sediment geochemical surveys, and diamond drilling in Year 1, followed by further diamond drilling in Year 2 to delineate mineral resources and metallurgical testwork, depending on results from Year 1.

São Luis Gold Project

The São Luis Gold Project is located on the border of Pará and Maranhão States in northern Brazil, about 250km west of Belém. It comprises 13 applications for exploration licenses in seven blocks covering 1,252km². It includes areas of high response in magnetic data which are interpreted to be Proterozoic granite-greenstone belts previously considered to be under thick more recent cover. On 13th August 2012, Paringa Brazil signed an agreement to acquire 100% interest in the project from Brazil Americas Investments & Participation Mineração Ltda.

The project area lies within the Gurupi Gold Province on the southern margin of the São Luis Craton. This craton is interpreted to be a remnant fragment of the West African Craton following the Mesozoic break-up of Pangea and is the southeastern part of the Guyana Shield. Both cratons host multi-million ounce gold deposits. In the Guyana Shield, Las Cristinas (27Moz), Choco 10 (11.1Moz), Rosebel (14.9Moz), Omai (5.2Moz) and Aurora (7.4Moz) are examples of world-class gold deposits in a similar geological environment. The Gurupi Gold Province hosts several gold deposits, including Piaba-Tatajuba (3.2Moz), Cipoeiro (1.8Moz), Cachoeira (0.7Moz) and Chega Tudo (0.6Moz). Reconstruction of the Pangea paleocontinent suggests that the Gurupi Gold Province is linked to the West African Craton and Guyana Shield.

For

per

sona

l use

onl

y

PROSPECTUS 43


Paringa Resources IGR – MINEWPER01035AA Page: iv Independent Geologist's Report – 25 September 2012

The São Luis Gold Project represents an early-stage opportunity located in a prospective geological/structural environment with known gold mineralisation. The main targets comprise linear and circular magnetic highs identified during a relatively recent airborne survey carried out by the Brazilian Geological Survey. Paringa intends to carry out a progressive two-phase exploration programme. Geological reconnaissance, rock sampling and regional stream-sediment sampling, soil sampling, ground magnetic and IP surveys, and auger drilling in areas of thin cover will be carried out, together with about 1,500m of diamond drilling.

Santo Antônio de Pádua Graphite Project

The Santo Antônio de Pádua Graphite Project is 100%-owned by Paringa Brazil. The project is located in northwestern Rio de Janeiro State, about 185km NE of Rio de Janeiro and comprises 12 applications for exploration licenses for a total of 224.6km².

The Project lies within the Mantiqueira Province, a highly complex structural zone deformed during the Brasília Orogenic Cycle, which is the host of all of Brazil’s current graphite production. Literature searches and geological reconnaissance by Paringa confirmed the presence of previously documented graphite occurrences in lenses hosted by the sillimanite-garnet-rich gneissic belt containing rocks of the Andrelândia Group. In general, individual graphite-bearing lenses range from 1-3m, but can form zones up to15m wide. The graphitic bodies dip about 50°-60°SE and the disseminated graphite occurs as “premium” fine-grained flakes.

In July 2012, Paringa carried out geological reconnaissance in two sectors of the 65km-long exploration property. This included collection of 18 rock-chip samples for chemical analysis. Assays indicated that total carbon contents range from 3.14->15.0% C in eight samples. Currently, the Santo Antônio de Pádua Graphite Project is at an early stage but indications are that there is good potential for locating premium flake graphite in high-tonnage, low-grade disseminated mineralisation and in vein-type high-grade crystalline lump and/or flake mineralisation.

A two-phase exploration programme has been proposed. In Year 1, exploration will include geological mapping to understand the structural control and better delineate the distribution of the mineralised horizons, preliminary petrography to characterise lithologies and the nature of graphite mineralisation, and trenching to sample mineralised horizons. Depending upon the results obtained in Year 1, Year 2 exploration would comprise preliminary metallurgical testwork, an induced polarisation survey to determine dimensions of mineralised bodies, and an initial diamond drilling programme.

São Fidélis Graphite Project

The São Fidélis Graphite Project is 100%-owned Paringa Brazil. The project is located in the northern Rio de Janeiro State, about 190km from Rio de Janeiro. The São Fidélis Graphite Project comprises two applications for exploration licenses for a total of 35.91km².

For

per

sona

l use

onl

y



Paringa Resources IGR – MINEWPER01035AA Page: v Independent Geologist's Report – 25 September 2012

According to the Brazilian Geological Survey (CPRM), there are four inactive graphite mines (Saudade, São Benedito and Serra do Colégio 1 and 2) and two graphite occurrences in the region. Of these, three inactive mines (Saudade, São Benedito and Serra do Colégio 1) and one occurrence lie within Paringa´s tenements. Government reporting in 1942 indicates that production grades from the Saudade mine were between 35% and 40% C and the graphite of very high quality (Oliveira, A.I., 1945). The São Fidélis Graphite Project is an early-stage project currently with very limited available information; however, the presence of abandoned graphite mines and the sporadic information about the good quality of the graphite make the project attractive.

The proposed exploration programme can be divided into two phases. Year 1 would comprise: geological and structural mapping, together with rock-chip sampling, preliminary petrography, and trenching to sample mineralised zones. In Year 2, preliminary metallurgical testwork, an induced polarisation survey and diamond drilling would be carried out.

Conclusions

Coffey considers that the proposed exploration strategies are consistent with the potential of the Projects, providing they are appropriately staged to allow careful review at the completion of each phase. Similarly, Coffey considers that the allocated expenditures are consistent with the proposed programmes.

For

per

sona

l use

onl

y

PROSPECTUS 45


Paringa Resources IGR – MINEWPER01035AA Page: 1 Independent Geologist's Report – 25 September 2012

1 INTRODUCTION

1.1 Terms of Reference

Paringa has commissioned Coffey Mining to prepare an Independent Geologist’s Report (IGR) on various gold and graphite projects in Brazil. Paringa’s tenements comprise 39.95km² of granted tenements and 1,514km² of tenements under application. A review and appraisal of the exploration potential of Minaçu Gold Project, São Luis Gold Project, and Santo Antônio de Pádua and São Fidélis Graphite Projects (Figure 1.1_1) have been prepared by Coffey Mining. The Minaçu Gold Project is located on the border of Tocantins and Goiás States, central Brazil, and represents an advanced-stage exploration property where current and previous artisanal mining, university research and exploration by junior companies has identified multiple gold occurrences. The São Luis Gold Project is located on the border of Maranhão and Pará States, northern Brazil, and represents an early-stage exploration gold venture on previously undefined granite-greenstone terrain on the margins of the São Luis Craton. This craton is interpreted to be a remnant fragment of the West African Craton following the Mesozoic break-up of Pangea. Santo Antônio de Pádua Graphite Project is an early-stage project located in Rio de Janeiro State, southeast Brazil, where university research has identified several graphite and manganese occurrences. The São Fidélis Graphite Project has seen no systematic exploration, although abandoned, high grade graphite mines exist in the project area.

The Report has been requested to accompany a prospectus to be prepared by Paringa and lodged with ASIC in October 2012.

The legal status of the assets in which Paringa has an interest, the various agreements covering those interests, and the exploration, mining and minerals processing legislation applicable have not been independently verified by Coffey Mining. The present status of tenements, agreements and legislation described in this report is based on information provided by Paringa and its solicitors, and the report has been prepared on the assumption that exploration and potential development of the Projects will prove to be lawfully allowable. Coffey Mining is not qualified to comment on the nature of the transactions or arrangements between Paringa and other parties.

The IGR has been prepared on information available up to and including 31st of August, 2012. The conclusions expressed in this report are therefore only valid up to this date and may change with time in response to variations in economic, market, legal or political factors, in addition to ongoing developments with respect to the planned exploration and development activities. All monetary figures included in this report are expressed in Australian dollars (A$) unless otherwise stated. All coordinates are expressed in the SAD69 datum.

For

per

sona

l use

onl

y




Figure 1.1_1 Project Locations

1.2 Qualifications, Experience and Independence

Coffey Mining is an exploration, mining and resource consulting firm, which has been providing services and advice to the international mineral industry and financial institutions for over 50 years.

For

per

sona

l use

onl

y

PROSPECTUS 47



The primary author of this IGR is Dr Marian Skwarnecki. Dr Skwarnecki is a professional geologist and geochemist with 22 years’ experience in exploration and evaluation of mineral properties in Australia and overseas. He is a Senior Consulting Geologist with Coffey Mining and is a Registered Professional Geoscientist (RPGeo) of the Australian Institute of Geoscientists (AIG). Mr Leonardo Soares, from Coffey Mining’s Belo Horizonte office, undertook the site visit to the Minaçu Gold Project on 15th-17th August, 2012 and to the Santo Antônio de Pádua Graphite Project on 18th-19th August, 2012; Mr Soares is a Member of the Australian Institute of Geoscientists (MAIG).

Both authors have the appropriate relevant qualifications, experience, competence and independence to be considered “Expert” or “Specialist” under the definitions provided in the VALMIN Code, and as “Competent Person” under the definition provided in the JORC Code.

Neither Coffey Mining, nor the authors of this report have, or have had previously, any material interest in Paringa, or the mineral properties in which Paringa has an interest. Our relationship with Paringa is solely one of professional association between client and independent consultant. This IGR is prepared in return for professional fees based upon agreed commercial rates and the payment of these fees is in no way contingent on the results of this report.

Coffey Mining is not in a position to make direct comment on any interest the directors and promoters of Paringa may have in the company or its assets, nor is Coffey Mining qualified to comment on or confirm this aspect.

1.3 Principal Sources of Information

The principal sources of information used to compile this IGR comprise technical records, along with technical reports and data variously compiled by Paringa and its consultants, and government agencies, along with discussions with Paringa technical and corporate management. A listing of the principal sources of information is included in Section 8 of this IGR.

In addition, Mr Leonardo Soares, from Coffey Mining’s Belo Horizonte office, undertook the site visit to the Minaçu Gold Project on 15th-17th August, 2012 and to the Santo Antônio de Pádua Graphite Project on 18th-19th August, 2012.

All reasonable enquiries have been made to confirm the authenticity and completeness of the technical data upon which this IGR is based. A final draft of this IGR was also provided to Paringa, along with a written request to identify any material errors or omissions.

Where original assay results were returned in ppb they have been converted to g/t (ppm) and rounded to two significant figures.

For

per

sona

l use

onl

y




2 COUNTRY BACKGROUND

2.1 History and Current Status

The first European to explore Brazil was Pedro Alvares Cabral on April 22, 1500 under the sponsorship of Portugal. From the 16th to the 19th centuries, Brazil was a colony of Portugal. On 7th September, 1822, the country declared its independence from Portugal and became a constitutional monarchy, the Empire of Brazil. A military coup in 1889 established a republican government. The country has seen dictatorships (1930–1934 and 1937–1945) and a period of military rule (1964–1985). Brazil is now a federal presidential constitutional republic with presidential elections every four years. There are 26 States and a capital district of Brasilia. Major cities include São Paulo, Rio de Janeiro, Belo Horizonte and Salvador.

The political environment in Brazil is stable. Brazil has been a member of the World Trade Organisation since 1995 and is a founding member of Mercosul, a trade liberalisation programme for the South American continent. The fundamentals of Brazilian macro-economic policy are based primarily on fiscal austerity, inflation control and free foreign exchange. The Brazilian economy, aided by a favorable international environment, grew approximately 5.2% in 2008, and has confirmed a significant growth of 7.5 % in 2010. Sustained growth has been associated with booming exports, re-organisation of external accounts, moderate inflation, decreasing unemployment indexes, and reductions in the debt-to-GDP ratio.

Total foreign debt, although falling, is still large compared to the export base. Over time, this concern will be reduced by healthy export growth, which has anchored the positive trade and current accounts in recent years. Sustaining high growth rates in the longer term depends on the impact of the structural reform programme and efforts to build a more welcoming climate for investment, both domestic and foreign. Judicial reform and an overhaul of the bankruptcy law were approved in late 2004, along with tax measures to create incentives for long-term savings and investments. Legislation promoting public-private partnerships, a key effort to attract private investment to infrastructure, was also approved in 2004.

In 2010, Brazil’s leading mineral exports in order of value were: iron ore, gold, niobium, copper, manganese, bauxite, lead and tin, and its leading imports were coal, potash, copper and zinc. Brazil’s mineral sector has grown as a result of new projects and expansions, and Brazil is expected to remain among the global leaders in the production of mineral commodities and to continue to attract investors in its mineral industry.

The 1995 constitutional amendment provided a landmark in Brazilian mining legislation by granting foreign companies the right to hold majority ownership in Brazilian projects and equality of fiscal and economic treatment. Nowadays, numerous multi-national major and junior mining companies operate in Brazil.

For

per

sona

l use

onl

y

PROSPECTUS 49



2.2 Geography, Climate and Infrastructure

2.2.1 Geography

Brazil has a total area of approximately 8.5 million km² and is slightly larger than Australia. The prevailing climate is tropical, with temperate regions towards the south. The topography is mostly flat, with rolling lowlands in the north, some plains and a narrow coastal belt. The total population is about 197 million and literacy is about 86%. The official language is Portuguese, although English, Spanish and French are also spoken. The capital is Brasília, located in the central region of the country.

The principal mountain ranges average elevations just under 2,000m. The Serra do Mar Range runs along the Atlantic coast, and the Serra do Espinhaço Range extends through the south-central part of the country. The highest mountains are in the Tumucumaque, Pacaraima and Imeri ranges which traverse the northern border with the Guianas and Venezuela.

Brazil's Central Highlands include a vast central plateau (Planalto Central). The plateau's uneven terrain has an average elevation of 1,000m. The rest of the country is made up primarily of sedimentary basins, the largest of which is drained by the Amazon and its tributaries. Of Brazil’s total area, 41% averages less than 200m in elevation. The coastal zone is noted for thousands of kilometres of tropical beaches interspersed with mangroves, lagoons, and dunes, as well as numerous coral reefs.

Brazil has one of the world's most extensive river systems, with eight major drainage basins, all of which drain into the Atlantic Ocean. Two of these basins, the Amazon and Tocantins-Araguaia, account for more than half the total drainage area. Through the Amazon Basin flows one-fifth of the world's fresh water. The Amazon is navigable by oceangoing vessels as far as 3,885km upstream, reaching Iquitos in Peru.

2.2.2 Climate

Although 90% of the country is within the tropics, the climate of Brazil varies considerably from the mostly tropical north to temperate zones below the Tropic of Capricorn (23°27'S latitude), which crosses the country at the latitude of the city of São Paulo. Brazil has five climatic regions: equatorial, tropical, semi-arid, highland tropical, and subtropical.

Temperatures along the equator are high, averaging above 25°C, but not reaching the summer extremes of up to 40°C in the temperate zones. There is little seasonal variation near the equator. At the country's other extreme, there are frosts south of the Tropic of Capricorn during the winter (June–August), and there is snow in mountainous areas.

Precipitation levels vary widely. Most of Brazil has moderate rainfall of 1,000-1,500mm per year, with most of the rain falling in the summer (between December and April) south of the Equator. The Amazon region is humid, with rainfall generally more than 2,000mm each year and reaching as high as 3,000mm in parts of the western Amazon and near Belém. Most of the central-western Brazil has 1,500-2,000mm of rain per year, with a pronounced dry season in the middle of the year, whereas the south has rainfall throughout most of the year without a distinct dry season. For

per

sona

l use

onl

y




2.2.3 Infrastructure

Roads are the primary method of transportation in Brazil of both passengers and freight. Brazil has the fourth largest roadway network in the world, behind the U.S.A., China and India. There are about 1.7 million kilometres of road, of which 196,000km (or 11.5%) are paved. Approximately 58% of all Brazilian cargo is transported via roadways; 25% goes by rail and 17% along various waterways. The government has implemented road construction plans in order to integrate the industrialised south with the less-developed northeastern and northern areas. This integration has enabled agricultural producers to move goods to ports located in the coastal areas for export.

The railway system in Brazil is restricted primarily to coastal areas. There are 31,000km of tracks in Brazil (excluding urban commuter lines). Currently, 5,000km of rail are under construction and an additional 8,000km under study.

Port cargo transport rose to 834Mt during 2010. However, Brazil is not among the top ten in the world in terms of cargo or container transported and still lags behind main global ports in terms of productivity (workforce), bureaucratic red tape, loading time delays and demurrage costs. A national dredging programme has identified 18 ports that urgently need dredging to allow for access of large vessels; two projects have been completed and four others are underway. Foreign investment is pending changes to law 6620/08 which restricts concessions to private terminals. In contrast, Brazil's air transportation is well developed with 48 main airports, 21 of which are international.

Brazil’s vast oil, considerable natural gas resources, and massive hydroelectric capabilities make Brazil one of the most energy self-sufficient countries in Latin America. The focus on power generation is likely to remain on hydro, but with a strong possibility of longer-term expansion of its nuclear capacity. Brazil is also at the forefront of renewable power projects such as biomass and wind power. The current generating capacity is 54,000MW.

2.3 Brazilian Mining Legislation

2.3.1 Mineral Tenure

Tenements in Brazil are granted subject to various conditions prescribed by the Mining Code, including rental payment and reporting requirements, and each tenement is granted subject to standard conditions that regulate the holder’s activities or are designed to protect the environment.

Mineral tenements in Brazil generally comprise Prospecting Licenses, Exploration Licenses and Mining Licenses. There is no statutory or other minimum expenditure requirement in Brazil. However, annual rental payments are made to the DNPM (Departamento Nacional de Produção Mineral) and the holder of an Exploration License must pay rates and taxes, ranging, based on current exchange rate, from US$1.18 to US$1.8 per hectare, to the Local Government.

If a mineral tenement is located on private land, then the holder must arrange or reach agreement with the landowners to access the property.

For

per

sona

l use

onl

y

PROSPECTUS 51



Prospecting Licenses

A Prospecting License entitles the holder, to the exclusion of all others, to explore for minerals in the area of the License, but not to conduct commercial mining. A Prospecting License may cover a maximum area of 50ha and remains in force for up to 5 years. The holder may apply for a renewal of the Prospecting License which is subject to approval by DNPM. The period of renewal may be up to a further 5 years.

Exploration Licenses

An Exploration License entitles a holder, to the exclusion of all others, to explore for minerals in the area of the License, but not to conduct commercial mining. The maximum area of an Exploration License is 2,000ha outside of the Amazonia region and 10,000ha within the Amazonia region (Amazonas, Pará, Mato Grosso, Amapá, Rondônia, Roraima and Tocantins States). An Exploration License remains in force for a maximum period of 3 years and can be successively renewed at the discretion of the DNPM upon request of the title holder. Any extension is at DNPM's discretion and will require full compliance with the conditions stipulated by the Mining Code which must be outlined in a report to DNPM applying for the extension of the License.

An Exploration License is granted subject to conditions regulating the conduct of activities, which includes the obligation to commence exploration work no later than 60 days after the Exploration License has been published in the Federal Official Gazette and not to interrupt it without due reason for more than 3 consecutive months or 120 non-consecutive days, to perform exploration work under the responsibility of a geologist or mining engineer, legally qualified in Brazil, to inform DNPM of the occurrence of any other mineral substance not included in the exploration permit, and to inform DNPM of the start or resumption of the exploration work and any possible interruption.

If the holder of an Exploration License proves the existence of a commercial ore reserve on the granted Exploration License, the DNPM cannot refuse the grant of a Mining License with respect to that particular tenement if the License holder has undertaken the following:

An exploration study to prove the existence of an ore reserve;

A feasibility study on the commercial viability of the ore reserve; and

The grant of an Environmental License to mine on the particular tenement.

Mining Licenses

A Mining License entitles the holder to work, mine and take minerals from the mining lease subject to obtaining certain approvals.

In Brazil, a Mining License covers maximum areas ranging from 2,000ha to 10,000ha, depending on the geographical area, as noted above, and remains in force indefinitely. The holder must report annually on the status and condition of the mine.

For

per

sona

l use

onl

y




As with other mining tenements, a Mining License is granted subject to conditions regulating activities. Standard conditions regulating activities include matters such as:

The area intended for mining must lie within the boundary of the exploration area;

Work described in the mining plan must be commenced no later than 6 months from the date of official publication of the grant of the Mining License, except in the event of a force majeure;

Mining activity must not cease for more than 6 consecutive months once the operation has begun, except where there is proof of force majeure or if the holder applies for suspension of mining activity;

The holder must develop the deposit according to the mining plan approved by the DNPM;

The holder must undertake the mining activity according to environmental protection standards detailed in an environmental License obtained by the holder;

The holder must pay the landowner’s share of mining proceeds according to values and conditions of payments set forth by law, which is a minimum of 50% of CFEM (see below), but it is usually agreed to be higher under a contract between the holder of the Mining License and the landowner; and

The holder must pay financial compensation to States and local authorities for exploiting mineral resources by way of a Federal royalty, CFEM, which is a maximum of 3% of revenue, but varies from state to state and according to the mineral substance subject to exploitation.

An application for a Mining License is granted solely and exclusively to individual firms or companies incorporated under Brazilian law, which will have a head office, management and administration in Brazil, and are authorised to operate as a mining company.

2.3.2 Brazilian Environmental Legislation

Article 225 of the Brazilian Constitution requires reclamation and rehabilitation of mined-out areas by the operators. All possible polluting activities are required to be licensed under the terms of the Brazilian National Environmental Policy (Federal Law 6.938 of 31 August 1981). Regulations for the administration are established by the National Council of the Environment’s (CONAMA) Resolution 237 issued on 19 December 1997. Licenses are issued by either a federal, state or a municipal agency and may be issued in one of the forms described in Table 2.3.2_1.

The LP, LI and LO are granted by the appropriate State environmental agency. The license will be subject to approval by the relevant municipality to confirm compliance with the Organic Act and the Municipal Law of Use and Occupation of the Terrain. This will be particularly important for the LP.

For

per

sona

l use

onl

y

PROSPECTUS 53



Table 2.3.2_1

Main Environmental Licensing Stages of Brazilian Mining Projects

License Description

Preliminary License (LP*) Indicates environmental viability of project; location and concept approval, subject to a specific environmental impact assessment and a formal public hearing.

Installation License (LI*) Authorises project initiation; permits the engineering work, subject to an environmental control plan.

Operation License (LO*) Authorises the start of operations; requirement to demonstrate establishment of all the environmental programmes and control systems.

* Brazilian abbreviation

In addition to the environmental license process and according to Resolution 237/97, requirements of the preliminary licensing phase also include:

Approval for water resources use;

The Authorisation for Forest Exploration (APEF) which is required in the cases where there is change in the Surficial Deposit usage or vegetation suppression; and

The Authorisation for disturbance of vegetation in Permanent Protected Areas (APP) or in Units of Conservation (UC) by the Authorised Environmental entity.

For

per

sona

l use

onl

y




3 REGIONAL GEOLOGY AND MINERALISATION

The geological history of Brazil spans the Precambrian to Holocene. The Precambrian comprises a mosaic of Archean nuclei and ancient cratonic fragments surrounded by Proterozoic mobile belts (Figure 3.1_1). Scattered among the cratonic fragments and mobile belts, exposed mostly in the northern, northeastern, and eastern parts of the country, are ancient crustal fragments which did not undergo the Proterozoic crustal re-working of Pangea. Corresponding parts of these ancient crustal fragments can be found in the West African or Kalahari cratons of Africa. The Archean and Early Proterozoic mobile belts generally are covered by Middle to Late Proterozoic sedimentary and volcanic rocks. The oldest cratonic consolidation culminated in the Early Proterozoic (Trans Amazonian orogenesis, >2.0 to 1.8Ga) and Middle to Late Proterozoic (Uruacuana (1.3-1.0Ga) and/or Brasília (0.75-0.5Ga) orogenesis). In the Phanerozoic, wide intracratonic basins formed after the Ordovician and were accentuated by narrow rift-type basins in the Jurassic and Cretaceous during opening of the Atlantic Ocean. Mesozoic and Cenozoic marginal basins border Brazil along the Atlantic coast.

Figure 3.1_1

Simplified Geological Map of Brazil

Source: Brasgeo – Geologia e Mineração Ltd

For

per

sona

l use

onl

y

PROSPECTUS 55



Brazil's natural resources include a large array of metallic deposits (Al, Au, Ba, Co, Cr, Cu, Fe, Mg, Mn, Mo, Nb, Ni, Pb, PGE, Sn, Ta, Ti, U, V, W, Zn, Zr) and precious and semi-precious gemstones (amethyst, beryl, diamond, emerald, topaz, tourmaline). The best-known metallic provinces (Quadrilátero Ferrífero and Carajas) contain world-class gold and iron deposits. Gold and banded iron-formation in the Quadrilátero Ferrífero have been the foundation for Brazilian mining for more than two centuries. In contrast, relatively recent discoveries (last few decades) of iron, gold, copper, and manganese in the Carajás region - including the world's largest iron ore deposits - have reinforced Brazil's role as a major world supplier of metals.

For

per

sona

l use

onl

y




4 MINAÇU GOLD PROJECT

4.1 Location

The Minaçu Gold Project is located on the border of Goiás and Tocantins states in central Brazil, approximately 280km north of the federal capital Brasília, and 400km north of Goiânia, the capital of Goiás State (Figure 4.1_1). It is located 43km northeast of Minaçu, a town with 30,000 inhabitants and with good infrastructure, including hotels, banks, hospitals, post office, telephone, ADSL internet and a varied commercial district which is strongly supported by the SAMA asbestos mine. Commercial flights are available from Brasília to Minaçu.

Figure 4.1_1

Minaçu Gold Project - Location

For

per

sona

l use

onl

y

PROSPECTUS 57



Except for the final 36km of gravel road, all access to the property from Goiânia and/or Brasília is made via paved or unpaved roads. The property, situated in the region known as the “Planalto Central Goiâno”, is characterised by sharp N-S topographic crests ranging in elevation from 700-850m. The narrow valley floors between crests range from 550-660m in elevation. The property area is dissected by a well-developed drainage network composed of tributaries of the Maranhão River, notably the Trairas, Custodio, Santo Andre and Gamba Rivers.

The climate is seasonal tropical and characterised by high humidity with temperatures ranging from 18°-22°C. Average annual rainfall is 2,000-3,000mm, mostly between November and April. Savannah vegetation or “cerrado” is typical of the region, but river banks are typically covered by thick vegetation known locally as “mata ciliar” or “eyebrow forest”. Soils in the project area are thin, resulting from the weathering of quartzite.

4.2 Mineral Tenure

The Minaçu Gold Project comprises three exploration licenses covering 59.43km² (Table 4.2_1 and Figure 4.2_1). The mineral rights were acquired by Paringa Brazil in June 2012. Two of the tenements have been transferred to Paringa Brazil with one still pending.

Exploration License 864.466/2008 covers the main known gold occurrences. Its initial three-year exploration permit period expired in January 2012, but was subsequently renewed for a new three-year period on 20th March 2012. The initial three-year exploration period for exploration license 864.508/2010 will expire on 31st March 2014. Exploration License 860.341/2009 is located adjacent to the town of Minaçu and does not form part of this IGR as the area has not been visited and assessed for exploration potential. Adjacent properties are held by other mining companies including Amarillo Mineração do Brasil Ltda, Bemisa Brasil Exploração Mineral SA, and Fortuna Mineral Ltda.

The legal status of the tenements in which Paringa has an interest has not been independently verified by Coffey Mining. Their present status is based on information provided by Paringa and its Brazilian solicitors and the report has been prepared on the assumption that the project will prove to be lawfully accessible for exploration and development.

For

per

sona

l use

onl

y


Cof

fey

Min

ing

Pty

Ltd

Par

inga

Res

ourc

es IG

R –

MIN

EWP

ER

0103

5AA

Pag

e: 1

4 In

depe

nden

t Geo

logi

st's

Rep

ort –

25

Sep

tem

ber 2

012

Tabl

e 4.

2_1

Min

açu

Gol

d Pr

ojec

t - T

enem

ent S

umm

ary

Mun

icip

ality

D

NPM

Pro

cess

No.

St

age

Min

eral

Ac

tual

Ow

ner

Size

(hec

tare

s)

Expi

ry D

ate

Par

anã

and

Cav

alca

nte

864.

466/

2008

E

xplo

ratio

n Li

cens

e G

old

Par

inga

Bra

zil

1,99

6.26

19

th M

arch

, 201

5 P

aran

ã an

d C

aval

cant

e 86

4.50

8/20

10

Exp

lora

tion

Lice

nse

Gol

d S

ergi

o Fo

nsec

a 1,

999.

02

31st M

arch

, 201

4

Min

açu

860.

341/

2009

E

xplo

ratio

n Li

cens

e G

old

Par

inga

Bra

zil

1,94

7.84

26

th F

ebru

ary,

201

3

Tota

l 59

43.1

2

For

per

sona

l use

onl

y

PROSPECTUS 59



Figure 4.2_1 Minaçu Gold Project - Tenement Map

For

per

sona

l use

onl

y




4.3 Geology and Mineralisation

4.3.1 Regional Geology

The Minaçu Gold Project is located within the Proterozoic Brasília Fold Belt, which developed between the Amazon and São Francisco cratons. Within the project area, the belt comprises metasedimentary rocks of the Arai (Paleoproterozoic) and Paranoa (Mesoproterozoic) Groups. On its southern extension, the belt also includes the metasedimentary units of the Canastra Group and together, these three units host significant gold mineralisation, including the 20.6Moz Morro do Ouro/Paracatu (Kinross Gold Corporation), Aurumina (Toniollo, Busnello S/A) and Cavalcante (Empresa Sul-Americana de Montagens S/A) mines and several gold occurrences, such as Rio do Carmo, Fartura and Santo Antônio (Figures 4.3.1_1 and 4.3.1_2).

Figure 4.3.1_1

Gold Occurrences in the Brasília Fold Belt

Source: Carta Geológica do Brasil ao Milionésimo, CPRM

For

per

sona

l use

onl

y

PROSPECTUS 61



Figure 4.3.1_2 Regional Geology of the Minaçu Gold Project


For

per

sona

l use

onl

y




4.3.2 Geology of the Project Area

The geology of the Minaçu Gold Project comprises quartzites and siltstones of the Araí and Paranoá Groups.

This sequence was strongly deformed during the Brasília-Pan African orogeny (750-600Ma), resulting in a complex structural control on gold mineralisation. The main structures are a series of asymmetric synforms and antiforms with axial planes trending NNE and NNW, to which parallel the main mineralised trends. Linear structures, trending N-S to NNW, associated with ENE- and WNW-trending strike-slip faults, complement the structural setting of the area and host the main quartz-pyrite-chalcopyrite-gold lodes and veins. Local controls of the mineralisation include NNE-NE dilatational zones, and stockworks.

The Minaçu Gold Project includes several garimpos and old Bandeirantes workings, which were initially mined in near-surface open pits and subsequently underground. To date, twelve prospects with previous workings have been identified within the property and informally named: Buracão, Trincheirão, Homero, Piscina, Mangabeira, Planta, Delegado, Imbira Branca, Dedê, Irmãos Coragem and Zé Rosa (Figure 4.3.2_1). Limited garimpeiro production continues at Mangabeira and Buracão.

Three main NNE-trending mineralised zones have been identified. The eastern zone comprises the Mangabeira occurrences. The central zone comprises the Buracão, Homero, Tincheirão Dedê and Piscina occurrences. The western zone comprises the Planta, Delegado, Irmãos Coragem, Zé Rosa and Imbira Branca occurrences (Figures 4.3.2_1).

Gold mineralisation has been interpreted to be largely associated with shear- or fault-related, sulphide-bearing quartz veining and gossanous material, mainly in quartzite, which contains thin intercalations of sericite and graphitic phyllite. As a general rule, quartzites are strongly fractured and silicified, whereas the metasiltstones are less fractured, but sheared.

Two types of gold mineralisation are recognised:

Type 1 related to shear zones and stockworks mainly hosted by more competent quartzites.

Type 2 related to shallowly-dipping quartz veins associated with sulphide-rich carbonate-graphite-manganese oxide alteration.

For

per

sona

l use

onl

y

PROSPECTUS 63



Figure 4.3.2_1 Known Gold Occurrences - Minaçu Gold Project

Source: Paringa Resources Ltd and Google Earth

For

per

sona

l use

onl

y




Type 1

This lode-type mineralisation ranges in thickness from <1-4m and dips steeply near-surface. Examples are Buracão, Trincheirão, Homero and Piscina, which strike NNE (Figure 4.3.2_2a). These zones appear to carry the highest grades at Minaçu, as indicated by the presence of old surface and underground workings. This type is a target for high-grade, narrow vein gold mineralisation.

Stockwork-type mineralisation is predominant at Planta, Delegado (Figure 4.3.2_2b) and Irmãos Coragem, as well as at Buracão West. Mineralised zones with quartz-sulphide stockworks vary in length from <10-400m and widths up to 50m. Sampling of such sulphide-rich veins produced intersections up to 3m @ 31.35g/t Au and 10m @ 19.64g/t Au. This mineralisation style is a target for large-tonnage, low-grade, open-pittable bulk-mineable reserves.

Type 2

The second style of mineralisation is observed at Mangabeira and Imbira Branca related to shallowly-dipping quartz veins associated with sulphide-rich carbonate-graphite-manganese oxide alteration (Figure 4.3.2_3a). At the northern end of Mangabeira, minor banded iron formations and sedimentary breccias are associated with phyllite. Sulphides are abundant, with zones of massive pyrite and locally significant chalcopyrite. (Figure 4.3.2_3b).

4.3.3 Alteration

Alteration is intense silicification and sulphidation, with carbonate (ankerite?), chlorite and sericite, weak magnetite, hematite and rare fluorite and barite development.

Sulphides are pyrite, minor chalcopyrite, arsenopyrite and stannite. Galena is occluded within pyrite grains. At surface, sulphides have been weathered, to gossan, and the gold distribution is erratic.

For

per

sona

l use

onl

y

PROSPECTUS 65



Figure 4.3.2_2 Minaçu Gold Project - Type 1 Mineralisation Styles

a) Quartz Lode-Type Mineralisation at Buracão Garimpo

b) Quartz Stockwork at Delegado Garimpo

Source: Paringa Brazil

For

per

sona

l use

onl

y




Figure 4.3.3_3 Minaçu Gold Project - Type 2 Mineralisation Styles

a) Host Rock to Gold Mineralisation at Mangabeira South Garimpo

b) Quartz-Pyrite-Malachite Mineralisation, Mangabeira (Source : DNPM, 2007)


For

per

sona

l use

onl

y

PROSPECTUS 67



4.4 Exploration History

Gold in the Minaçu region was discovered and mined during the 18th century by colonial pioneers (“Bandeirantes”), who mined alluvial deposits and weathered rocks. The extent of their workings suggests that a significant amount of gold was produced from the property.

In the early 1980s, a modern-day gold rush commenced when artisanal miners (“garimpeiros”) started to reprocess material mined by the Bandeirantes, and to mine all other possible sources of gold, including alluvial, colluvial and weathered primary mineralisation. Informal records indicate an estimated total garimpeiro production of about 120,000oz of gold. Garimpeiro workings were concentrated at Buracão, Homero, Trincheirao, Piscina, Mangabeira, Planta and Imbira Branca, in addition to other minor zones. Limited garimpeiro activity (10-20 people) on the property continues at Mangabeira and Buracão.

Exploration in 1984-1985 included geological mapping, heavy mineral pan concentrate (“HMC”) sampling, soil sampling, channel and rock-chip sampling, and ground geophysical surveys including Max-Min, IP and magnetics and seven exploratory diamond drillholes for a total of 1,001.29m.

In 1985, a trenching programme was carried out when the property was optioned. In 1986, preliminary (pre-JORC) "reserves" were defined from primary and secondary mineralisation, and Bandeirante tailings. Subsequently, a market and engineering study for a commercial mining operation at Buracão, based largely upon the work carried out between 1984 and 1986. As part of the study, a small pilot gravity plant was installed at Planta to process ore exploited from Buracão and Trincheirao. However, the presence of abundant sulphides resulted in poor recovery and the plant was shut down after just four months of operation.

In late 1994, the property was optioned again and exploration comprising field reconnaissance, geological mapping and sampling of mineralisation exposed in the garimpeiro workings was initiated. Detailed mapping and sampling were concentrated at the Mangabeira, Trincheirao, Buracão and Planta.

At the end of 1995 and beginning of 1996, the property was further optioned. Surface sampling of garimpeiro mining areas was completed, and the conclusion was that the property had limited potential for hosting a bulk mineable gold deposit and discontinued further exploration.

In late 1996 and 1997, a review of the available data and assessment of the exploration potential of the project was conducted by the company holding the option over the property at the time. A recommendation was made to continue exploration and carry out a drilling program. However, this work was never done.

From 2004 to 2007, mapping, IP and ground magnetic surveys, regional stream-sediment geochemistry, soil and rock sampling, and a short diamond drilling programme of 13 drillholes for a total of 1,269.45m was completed.

For

per

sona

l use

onl

y




4.5 Historical Exploration Results

This section contains a summary of the historical exploration results currently available to Paringa. It is important to note that results for some activities described in Section 4.4 are not currently available.

4.5.1 Heavy Mineral Pan Concentrate (HMC) Survey

The HMC Survey covered most of the Minaçu Gold Property, except for the NW portion. Methodology consisted of collecting 10L of <4mm alluvium and generating a concentrate of heavy minerals which were subsequently submitted to gold-grain counting, expressing the final values as a number of gold grains (“colours”)/10L. Sample stations were predominantly distributed along first- and second-order drainages. The results defined two anomalous regions. The first and largest anomaly is located in the southeastern portion of the property, coincident with the known mineralised gold trends at Buracão and Mangabeira, and represented by peak values of 250, 150, 70 and 62 Au colours/10L. The second zone is located on the western edge of the property and delineated by an isolated value of 86 Au colours/10L.

4.5.2 Stream-Sediment Sampling

Stream-sediment sampling partially covers the property, concentrating mainly on the SE and WNW portions of the tenements. The size fraction analysed was <80 mesh and samples were analysed by ICP for 31 elements. Two elevated gold values were recorded, including 98ppb Au on the southern extreme of the property and 36ppb Au on the western extreme. No further follow-up on these points was conducted.

4.5.3 Soil Sampling

A soil sampling programme was carried out on lines 200m apart and samples collected at 40m spacing. Areas being actively mined by garimpeiros were excluded from the survey. Gold-in-soil results showed elevated values (>50ppb Au) occur at Mangabeira South, Buracão and Planta, but the most anomalous sample cluster is located to the west of the existing mineralised zones in an area informally known as Chinelo na Mão, where six values >50ppb Au, including 383, 334 and 297ppb Au, were reported (Figure 4.5.3_1).

4.5.4 Induced Polarisation (IP) and Ground Magnetic Surveys

IP and ground magnetic surveys covering the whole soil grid (about 15 line-km). Four main geophysical domains were identified associated with schists between quartzite units.

Several IP anomalies were singled out as N-S linear trends, locally coincident with the known gold occurrences (Figure 4.5.4_1).

For

per

sona

l use

onl

y

PROSPECTUS 69



Figure 4.5.3_1 Minaçu Gold Project – Gold (ppb) in Soils

Adapted from Paringa Partial Exploration Report, 2011

For

per

sona

l use

onl

y




Figure 4.5.4_1 Minaçu Gold Project – Principal IP Anomalies


For

per

sona

l use

onl

y

PROSPECTUS 71



4.5.5 Drilling

Two diamond drilling programmes have been conducted in 1984 and 2006-2007. The 1984 drilling programme comprised 7 holes for 1,001.29m. Four drillholes were collared in the vicinity of Trincheirão, and the other three holes were located at Homero, Piscina and Mangabeira. The locations of these drillholes are not accurately known, as they were collared on a local grid. In addition, most of the drill logs and assay data are missing. The only significant intersection recorded was hole MI-D5 of 0.85m @ 5g/t from 43m at Trincheirão. In 2006-2007, Amazônia completed a short diamond drilling programme which consisted of 13 holes for 1,269.45m, at five of the prospects: Buracão - four drillholes; Homero, Planta, Delegado - one each; and, six at Mangabeira (Figure 4.5.5_1). Several problems were reported during this drilling programme, including low recovery and poor drilling performance which culminated with the termination of drillholes before reaching their target depths and, in some cases, the necessity to drill a twin hole to continue to the target depth.

Table 4.5.5_1

Minaçu Gold Project – Best Diamond Drill Intersections

Prospect Drillhole Easting Northing From (m)

To (m)

Length (m)

Au (g/t) Comments

Buracão FDBU-02 177406 8528530 40.26 42.59 2.33 0.41 Gossanous quartz-muscovite schist with

boxworks after pyrite> chalcopyrite FDBU-03 177404 8528538 3.17 4.06 0.89 0.4 Quartzite with cross-cutting quartz veinlets FDBU-03 177404 8528538 17.63 18.5 0.87 0.42 Quartzite with cross-cutting quartz veinlets

Planta FDBU-06 177250 8529050 12.6 13.1 0.5 3.68 Quartzite with cross-cutting quartz veinlets; locally visible gold

Delegado

FDBU-09 177236 8529144 18.221 18.72 0.5 0.98 Quartz veins with goethite and locally visible Au FDBU-09 177236 8529144 19.3 20 0.7 1.55 Quartz veins with goethite and locally visible Au FDBU-09 177236 8529144 21.16 21.66 0.5 8.48 Quartz veins with goethite and locally visible Au FDBU-09 177236 8529144 24.1 24.45 0.35 4.15 Quartz veins with goethite and locally visible Au

1 Full intersection (18.22-24.45m): 6.23m grading 1.18g/t Au, with anomalous As (2,479ppm), Bi (922ppm), Cu (327ppm)

For

per

sona

l use

onl

y




Figure 4.5.5_1 Minaçu Gold Project – Location of Diamond Holes Drilled in 2006-2007


For

per

sona

l use

onl

y

PROSPECTUS 73



4.6 Major Prospects

4.6.1 Buracão

The Buracão gold occurrence was mined by garimpeiros down to a depth of 40m, with an exposed strike length of 250m, but with eluvial and colluvial workings extending up to 100m to the north of the existing open pit. The main mineralisation is associated with white quartz veining commonly with vugs and containing goethite (after sulphides) that strikes NE and dips around 70°NW, flattening with depth and showing a sigmoidal pattern along the strike (Figure 4.6.1_1). Thickness is variable from 2-20m, but averages 4m. Strong quartz veining and alteration continues west of the existing Buracão workings.

Figure 4.6.1_1

Minaçu Gold Project – Mineralised White Quartz Vein with Goethite (after Sulphides). Buracão Prospect


A sample from the feed to a garimpeiro plant, taken by the previous explorer, returned 7.26g/t Au, whereas channel sampling at the open pit and an underground shaft returned 4m @ 29.2g/t Au, 1m @ 3.8g/t Au, 1m @ 0.9g/t Au, 1.6m @ 11.3g/t Au, 0.4m @ 1.4g/t Au and 2m @ 8.64g/t Au. Sulphide-rich veins were sampled, with best intersections represented by 3m @ 31.35g/t Au and 10m @ 19.64g/t Au.

Seventeen channel samples and two rock grab samples over the main quartz vein and the quartzite host rock were collected by a previous explorer. Best results included: 2m grading 16.88g/t Au (including 1m grading 29.52g/t Au) from a sulphide-rich quartz vein and 0.75m grading 8.52g/t Au from sheared quartzite (Figure 4.6.1_2). Further channel sampling in the Buracão West area returned 3.57g/t Au over 1m, 2.34g/t Au over 1m and 3.92g/t Au over 1m.

For

per

sona

l use

onl

y




Figure 4.6.1_2 Buracão Prospect – Rock Sampling and Assays

Original assays were reported in ppb. In this report they are represented as g/t (ppm) rounded to two significant figures.

Four panel samples and nine channel samples within the pit were collected, with best results being 0.6m @ 9.22g/t Au (channel), 3.16g/t Au and 1.17g/t Au on panels (Figure 4.6.1_3). Of the four drillholes (Figure 4.6.1_2), only FDBU-2 and FDBU-3 returned anomalous intersections (Table 4.5.5_1).

For

per

sona

l use

onl

y

PROSPECTUS 75



Figure 4.6.1_3 Buracão Prospect – Geological Map, Drillhole Locations and Rock-Chips


For

per

sona

l use

onl

y




4.6.2 Trincheirão

Trincheirão is located approximately 1,000m north of the Buracão workings and was extensively mined by the Bandeirantes in the 18th century. Trincheirão forms part of a NNE trending mineralised zone with Buracão and Homero to the south and Piscina to the north, a total distance of over 2km. The main excavation consists of a 5-10m wide slot, about 200m long, trending NNE, and varying in depth from 5m in the north to 15m in the south (Figure 4.6.3_1). Wallrocks are quartzites with thin intercalated lenses of sericite schist. Typical material mined by the artisanal miners is highly weathered hematitic/goethitic quartz veining within schists. The depth of workings is unknown. The intersection of underground mine opening in FDBU 4 between 90.05m and 98.91m at Homero, along the same trend and to the south of Trincheirão, suggests that the Bandeirantes may have mined the Trincheirão – Homero trend extensively at depth.

Quartz-vein stockwork zones trend ENE for approximately 60m along strike on the western and eastern walls at the southern end of the pit. This stockwork system is characterised by 0.2-0.3m-wide ENE-trending quartz-goethite veins spaced at approximately 5m intervals relative to each other. Between these veins, a network of short discontinuous cross-cutting quartz veinlets occurs along most of the fractures in the quartzite.

An extensive channel sampling programme of 228 samples was carried out by a previous explorer. A total of 27 samples returned grades greater than 1g/t Au, Table 4.6.3_1 lists the highest grades (> 5g/t Au) and their location is shown in Figure 4.6.3_2.

4.6.3 Mangabeira

The Mangabeira trend is located 300m to the east of Buracão and comprises a series of NNE aligned adits, galleries and pits over a distance of 900m. The main known areas of mineralisation, from south to north, are: Billy Joe, Marimbondo, Tiaozâo, Nóia, Adão, Rivalino, Túnel and Passarinho. Gold mineralisation is associated with secondary structures off the main shear zone and the geometry is ellipsoidal, with the main axis along a NNE to NE direction, dipping from 40º to subvertically to the east. The mineralised zone is represented by a quartz-sulphide core 0.5-5m thick. The host rock is carbonate-manganese oxide-quartz (graphite) schist, foliated and generally banded, with auriferous quartz-sulphide veinlets cutting the foliation. Grades of up to 8g/t Au have been reported.

Sampling carried out by previous explorer at Mangabeira returned grades of 0.92g/t - 52.6g/t Au in veins, 0.76g/t - 7.26g/t Au in the carbonate-manganese oxide (graphite?)-quartz wall rock, and 25.8g/t Au in sample feed to the garimpeiros’ plant. Two channel samples returned 0.4m grading 9.3g/t Au and 3m grading 5.7g/t Au.

For

per

sona

l use

onl

y

PROSPECTUS 77



Figure 4.6.3_1 Trincheirão Prospect – General View of the Old Workings


Table 4.6.3_1

Minaçu Gold Project - Gold Grades >5g/t – Rock Channel Sampling at Trincheirão

Length (m) Grade (g/t Au) Description 1 8.35 Phyllite with boxworks and ferruginous bands

0.8 10.28 Quartzite and phyllite with boxworks 1 20.31 Quartzite

0.7 30.00 Carbonate-bearing phyllite with boxworks and quartzitic bands

For

per

sona

l use

onl

y




Figure 4.6.3_2 Trincheirão Prospect – Geological Map, Drillhole Locations and Rock-Chips


For

per

sona

l use

onl

y

PROSPECTUS 79



A second phase of historical sampling was conducted at Mangabeira comprising 92 rock channel samples, 81 panel samples and 10 rock-chip samples (Figure 4.6.4_1):

at Tiaozão open pit, one channel sample returned 1.3m grading 66.78g/t Au;

at Nóia open pit, 13.19g/t Au and 5.6g/t Au were obtained from two 1m channels; in addition, four other channels assayed 1-5g/t Au (2.84, 1.59, 1.45 and 1.35g/t Au);

at the Marimbondo adits, the most significant intersections were 14.27g/t Au over 1m, 6.73g/t Au over 0.81m, 1.46g/t Au over 0.6m and 1.03g/t Au over 0.6m; and

along the Billy Joe gallery, a channel sample returned 3.44g/t Au over 1m and a panel measuring 1.0 by 0.7m assayed 1.06g/t Au; in the open pit, a channel 1m in length reported 1.92g/t Au.

Although the drillholes shown in Figure 4.6.4_1 intersected zones of hydrothermal alteration, no significant gold intersections were reported.

4.6.4 Piscina

Piscina is located 1,900m north of Buracão and consists of a 100m-long by 10-40m wide-open pit excavated by the artisanal miners. Geologically, the Piscina pit area (from west to east) comprises a quartzite unit in contact with a greyish, very fine-grained weathered schist (locally with graphite and euhedral magnetite and pyrite) followed by a second quartzite unit with very thin quartz vein stockworks. The units strike N10ºE with variable dips ranging from 40-72°SE. A brecciated quartz vein occurs within the schist unit and apparently is not mineralised. A goethite-rich quartz vein, locally gossanous, occurs in the hanging wall of the schist unit on the contact zone with the upper quartzite unit and trends parallel to the fold axis.

A channel sampling programme of 11 samples was carried out by a previous explorer, with the best intersection reporting 1m grading 2.40g/t Au from the sericite schist unit. In addition, 14 rock-chip samples were collected over gossanous zones. A petrographic study indicated that these gossans can contain up to 60% boxworks after sulphides (mostly chalcopyrite and pyrite), as well as native gold. Assays from these gossans included 4.71g/t, 3.18g/t, 2.55g/t and 1.44g/t Au.

For

per

sona

l use

onl

y




Figure 4.6.4_1 Mangabeira Prospect – Geological Map, Drillhole Locations and Rock-Chips

F

or p

erso

nal u

se o

nly

PROSPECTUS 81



4.6.5 Planta

Planta is located 530m north of Buracão pit on a different mineralised trend. The prospect consists of a linear open pit approximately 80m long by 25-20m wide, oriented along a ENE-trend.

The pit geology consists of two thickly-bedded quartzite units with a 0.10-0.75m thick flat-lying graphitic schist unit separating both beds. Towards the SW end of the pit, a thick sequence of saprolitic sericite schist is in contact with the quartzite unit. The entire sequence is located along an interpreted west-dipping anticlinal limb.

Gold mineralisation is hosted by a shear zone characterised by two parallel brittle shears along the northwest and southeast walls with minor amounts of ferruginous quartz veining and quartz vein stockworks with clusters of sulphides (pyrite+chalcopyrite) between the shears. The sulphide-bearing quartz vein stockworks are mostly concentrated in the lower quartzite bed. Quartz vein stockworks are rare in the graphitic schist unit. The quartzite host rock is moderately to strongly silicified, where development of quartz vein stockworks is intense.

In 1996 and 1997 a total of 17 rock samples (16 chips, 1 grab) from various sequences found at Planta in order to determine which unit(s) is auriferous. Six of the 17 samples, returned assays greater than 1g/t Au however sample coordinates are not documented (Table 4.6.5_1).

Table 4.6.5_1

Minaçu Gold Project - Gold Grades >5g/t –Rock-Chip and Grab Sampling at Planta

Sample No. Rock Type and Length Fire Assay (g/t Au)

Screened Fire Assay (g/t Au)

DCL-61 Quartzite (0.45m) 1.84 DCL-64 Quartz vein in quartzite (0.7m) 4.25 4.1 DCL-69 Quartz vein (0.3m) 1.97 DCL-72 Quartzite with sulphides 5.16 7.45 DCL-73 Quartzite with sulphides 1.14 DCL-74 Weathered schist (1.2m) 1.98

More recently two panel samples were collected, which returned 2.60 and 0.93g/t Au. Drillhole FDBU-6 only returned one significant intersection: 0.5m @ 3.68g/t (from 12.6-13.1m).

4.6.6 Other Gold Occurrences

The Homero gold occurrence is located 550m north of Buracão along the Trincheirão trend. The old workings extend about 90m along strike. A NE-trending quartz vein, locally with weathered sulphides and ferruginous sericite schist, is hosted by massive quartzite with hematite along fractures and joints. Very restricted surface sampling has been conducted over this area. Channel sampling returned low gold values, with a maximum of 0.48g/t Au. Drillhole FDBU-4 (Figure 4.6.2_1) did not return any significant gold intersections, however intersected clay filled mine workings at between 90.05m and 98.91m downhole, and again from 106.7m and 113.61m downhole.

For

per

sona

l use

onl

y




Delegado is located 80m north of the Planta pit and consists of an open pit 80m long by 25m wide and containing a quartzite unit with moderate to dense quartz vein stockworks generally trending ENE and containing small clusters of pyrite along vein/quartzite boundaries or within open fractures in the sulphide-bearing quartz veins. Nineteen channel samples collected by previous explorers failed to show significant grades, however one panel sample taken from the northwestern wall of the pit and returned 2.58g/t Au. Drillhole FDBU-9 returned four narrow significant gold intersections (Table 4.5.5_1).

Irmaos Coragem is located 60m north of Delegado and is an open pit 75m long by 20m wide oriented along ENE. Gold was exploited from a zone filled by metre-scale quartz veins cutting a footwall quartzite unit with quartz stockwork veining trending from ENE to SE. The hanging wall consists of a quartz-vein stockwork-bearing quartzite unit with minor units of sericite schists and quartzite. There are no significant sample results.

Zé Rosa is located 420m north of Planta and consists of two small open pits measuring 15m by 4m and 13m by 4m. The geology comprises two typically brecciated quartz veins, with fractures filled by goethite. The main orientation is NNE, although the veins are commonly sigmoidal. The host rock is a quartzite unit with ferruginous bands and locally with quartz-vein stockworks. Panel sampling returned grades of 2.39g/t Au on the northeastern side of the pit and 2.35g/t Au on the southwestern side. In addition, 9 rock channel samples on the northwestern wall of the pit, returned 15.27, 5.78, 2.42, 1.55 and 1.39g/t Au.

Imbira Branca lies about 800m north of Planta. The area was the site of extensive surface and underground “Bandeirante” workings, and later surface exploitation by garinpeiros. Gold mineralisation is associated with a highly weathered quartzitic schist and sericite schist hosted by fine-grained, thickly bedded quartzite unit. All the workings occur along the western side of a steep ridge, located approximately 100m above the valley floor.

In 1996 and 1997, weathered material from three adits was sampled, as well as representative samples collected from the waste dump material. Best results are summarised in Table 4.6.6_1.

Table 4.6.6_1

Minaçu Gold Project – Rock-Chip and Grab Sampling at Imbira Branca

Sample No. Rock Type and Length Fire Assay (g/t Au)

Screened Fire Assay (g/t Au)

DCL-149 Sericite schist/quartzite (grab from dump) 4.74 2.62 DCL-150 Quartz vein (grab) 0.47 DCL-151 Weathered quartzite (0.9m) 0.50

A previous explorer collected 13 rock channel samples which returned a maximum value of 0.14g/t Au.

For

per

sona

l use

onl

y

PROSPECTUS 83



4.7 Exploration Potential

Proterozoic mobile belts are important hosts to gold mineralisation in Brazil. Based on the known gold occurrences and their perceived structural setting, the potential is for high-grade, narrow vein gold mineralisation. Additional exploration targets to those already identified from historical miners and explorers can be generated:

Down-dip and along strike of the known mineralised systems, mainly at Trincheirão to Piscina, Homero, Imbira Branca, Mangabeiras, Buracão, and Planta.

Parallel to known trends using mainly structural mapping and geochemistry to identify new zones.

Stream-sediment and soil anomalies have been identified in the extreme west of the Project associated with historical workings (Chinelo na Mão anomaly). There appears to have been no subsequent follow-up and these remain as valid targets. It is likely that an orientation geochemical survey to determine the best size fraction for stream sediment sampling will result in better anomaly definition within and external to existing workings.

4.8 Proposed Exploration Programme and Budget

Paringa has proposed a two-phase exploration programme over two years.

Year 1 would comprise:

A topographic survey is proposed to provide an accurate base for ongoing exploration.

Further geological and structural mapping supported by surface sampling and trenching will be undertaken to investigate the potential of the known gold occurrences and their possible extensions along the strike.

Orientation soils and stream-sediment surveys will be conducted to determine optimum sampling methodology and to examine whether previous soil and stream-sediment sampling was effective.

A diamond drilling programme is proposed during Year 1 to evaluate the depth potential of the known gold mineralisation. The diamond drilling programme as proposed would consist of approximately 2,000m of NQ diamond drilling.

The recommended Year 1 programme should take approximately 6 months to complete. The budget to complete this exploration programme is estimated at A$1,117,500.

Depending upon the results of the Year 1 programme, Year 2 would comprise:

A drilling programme for delineation of mineral resources. Given the size and the number of known mineralised targets at Minaçu, it is anticipated that at least 10,000m of additional diamond drilling would be required.

Metallurgical testwork should also be conduct during this exploration phase.

It is estimated that an adequate budget of AU$3,493,500 would be required to complete the Year 2 programme.

For

per

sona

l use

onl

y




Table 4.8_1 illustrates the proposed budgets for Year 1 and Year 2.

Table 4.8_1 Minaçu Gold Project - Proposed Exploration and Evaluation Expenditure

Activity Year 1 (A$)

Year 2 (A$)

Total (A$)

Option Payments 180,000 200,000 380,000 Diamond Drilling 315,000 2,000,000 2,315,000 Assaying 80,000 360,000 440,000 Field Operations and Vehicles 172,000 172,000 344,000 Surveying 5,000 2,500 7,500 Government Fees 6,500 6,500 13,000 Travel and Accommodation 59,000 59,000 118,000 Geological and Structural Mapping 10,000 17,000 27,000 Mineral Resources Estimates - 21,000 21,000 Metallurgy and Mineralogy - 65,500 65,500 Staff and Contractors 700,000 820,000 1,520,000 Total $1,527,500 $3,723,500 $5,251,000

4.9 Coffey Mining Conclusions and Recommendations

The Project overlies prospective stratigraphy associated with the Brasília Fold Belt developed during the Brasília tectonic cycle. This belt hosts several known gold deposits and numerous gold occurrences.

Within the Project area, several episodes of folding, faulting/shearing of the quartzites and metasiltstones are associated with hydrothermal alteration and mineralisation. Gold mineralisation occurs as quartz vein stockwork zones and vuggy sulphide-bearing quartz veins.

Historical drilling programmes at several prospects failed to find significant mineralisation at depth but in part this can be explained by poor understanding of the structural controls on the different types of gold mineralisation. The problem seems to have been exacerbated by the nuggetty nature of the gold distribution and inappropriate drilling capacity, which caused the abandonment of several drillholes before reaching their target depths. Several known gold occurrences and surface gold geochemical anomalies remain untested or only partially tested.

Coffey Mining considers that the Minaçu Gold Project is prospective for potentially economic high-grade, albeit modest sized, gold deposits. The proposed exploration programmes are considered appropriate given the nature of the opportunities and the budgets are considered appropriate given the exploration potential. Coffey Mining further considers that the budgets are adequate to achieve the stated objectives.

For

per

sona

l use

onl

y

PROSPECTUS 85



5 SÃO LUIS GOLD PROJECT

5.1 Location

The São Luis Gold Project is located on the border of Pará and Maranhão States in the northern Brazil, about 250km west of Belém and 240km east of São Luis, the capitals of Pará and Maranhão states, respectively (Figure 5.1_1).

Figure 5.1_1

São Luis Gold Project - Location

The best road access is from Belém to Capanema along highway BR-316 (164km) and then continuing on the same highway for another 122km to reach the southern tenements, or along highway BR-308 from Capanema for 139km to reach the northern tenements (Figure 5.1_1). The major centre in the region is Viseu which is 20km north of the northern tenements and about 70km north of the southern tenements. Viseu has approximately 55,000 inhabitants and good infrastructure, including hotels, banks, hospitals, schools and general communication systems.

The climate is tropical, very humid with annual rainfall of up to 3,000mm. The main rainy season is from mid-December to mid-July, with the heaviest rains in January to April. The temperature is relatively steady, ranging from an average low of 24°C to a high of 31°C.

Labour is available in the nearby towns and villages, whereas skilled labour can be found in larger towns such as Belém and São Luis. For

per

sona

l use

onl

y




The properties lie within 100km of the Atlantic coast. The region is a peneplain with low rounded and elongated hills. Typical vegetation is the “cerrado” and the main drainage systems consist of São Luis River, Maracaçume River and Piri River.

5.2 Mineral Tenure

The São Luis Gold Project comprises 13 applications for exploration licenses in seven blocks covering 125,197ha (Table 5.2_1; Figure 5.2_1). The applications were made in the name of Brazil Americas Investments & Participation Mineração Ltda. On 13 August 2012, Paringa Brazil signed an agreement to acquire 100% interest in the project. The legal status of the tenements in which Paringa has an interest has not been independently verified by Coffey Mining. The present status of the tenements is based on information provided by Paringa and its Brazilian solicitors and the report has been prepared on the assumption that the project will prove to be lawfully accessible for exploration and development.

Figure 5.2_1

São Luis Gold Project – Tenement Map

For

per

sona

l use

onl

y

PROSPECTUS 87

Cof

fey

Min

ing

Pty

Ltd

Par

inga

Res

ourc

es IG

R –

MIN

EWP

ER

0103

5AA

Pag

e: 4

3 In

depe

nden

t Geo

logi

st's

Rep

ort –

25

Sep

tem

ber 2

012

Tabl

e 5.

2_1

São

Luis

Gol

d Pr

ojec

t - M

iner

al T

enem

ent S

umm

ary

Mun

icip

ality

D

NPM

Pro

cess

No.

St

age

Min

eral

A

pplic

ant

Size

(ha)

Ex

piry

Dat

e Am

apá

do M

aran

hão

806.

588/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,53

4.27

pe

ndin

g Am

apá

do M

aran

hão

806.

589/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,85

1.02

pe

ndin

g C

ândi

do M

ende

s 80

6.59

0/20

11

Und

er a

pplic

atio

n G

old

Braz

il Am

eric

as In

vest

men

ts &

Par

ticip

atio

n M

iner

ação

Ltd

a 9,

890.

18

pend

ing

Boa

Vist

a do

São

Lui

s 80

6.59

1/20

11

Und

er a

pplic

atio

n G

old

Braz

il Am

eric

as In

vest

men

ts &

Par

ticip

atio

n M

iner

ação

Ltd

a 9,

733.

44

pend

ing

Car

utap

er

806.

596/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,90

9.29

pe

ndin

g Br

agan

ça

851.

136/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

7,03

4.29

pe

ndin

g Vi

seu

851.

137/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,95

4.10

pe

ndin

g Vi

seu

851.

138/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,91

9.02

pe

ndin

g Vi

seu

851.

139/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,92

6.56

pe

ndin

g Vi

seu

851.

140/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,93

4.80

pe

ndin

g C

acho

eira

do

Piriá

85

1.14

1/20

11

Und

er a

pplic

atio

n G

old

Braz

il Am

eric

as In

vest

men

ts &

Par

ticip

atio

n M

iner

ação

Ltd

a 9,

701.

63

pend

ing

Car

utap

era

851.

142/

2011

U

nder

app

licat

ion

Gol

d Br

azil

Amer

icas

Inve

stm

ents

& P

artic

ipat

ion

Min

eraç

ão L

tda

9,90

9.92

pe

ndin

g C

acho

eira

do

Piriá

85

1.14

3/20

11

Und

er a

pplic

atio

n G

old

Braz

il Am

eric

as In

vest

men

ts &

Par

ticip

atio

n M

iner

ação

Ltd

a 9,

898.

48

pend

ing

Tota

l 12

5,19

7.00

ha

(s

ourc

e D

NP

M –

Aug

ust 2

012)

For

per

sona

l use

onl

y






The São Luis Gold Project area lies within the Gurupi Gold Province on the southern margin of the São Luis Craton. Reconstruction of the Pangea paleocontinent suggests that the Gurupi Gold Province is a Proterozoic granite-greenstone sequence that was part of the West African Craton and Guyana Shield (Figure 5.3.2_1) prior to the Mesozoic break-up of the paleo-continent of Pangea. Both the West African Craton and Guyana Shield host multi-million ounce gold deposits. In the Guyana Shield which has a total known endowment of over 100Moz, the Las Cristinas (27Moz), Choco 10 (11.1Moz), Rosebel (14.9Moz), Omai (5.2Moz) and Aurora (7.4Moz) deposits are good examples of Proterozoic granite-greenstone-hosted world-class gold deposits.

Recent exploration successes within the Guyana Shield are reported by Azimuth Resources Limited (ASX-AZH), Beadell Resources Limited (ASX-BDR), Luna Gold Corporation and Brazil Resources Inc.

The region can be divided into three major geotectonic provinces (Figure 5.3.1_1):

Paleoproterozoic granite-greenstone terrain;

Mesoproterozoic sedimentary sequences and Neoproterozoic intrusions, and;

Paleozoic-Cenozoic sedimentary basins.

The Proterozoic granite-greenstone terrain consists of the Maracaçumé Complex and the Gurupi and Aurizona Groups. The Maracaçumé Complex comprises amphibolite facies ortho- and paragneisses and migmatites. The main lithologies are tonalites, trondhjemites, kinzigites, and minor granodiorites. The Gurupi and Aurizona Groups are mainly greenschist-facies volcano-sedimentary units, comprising mafic-ultramafic amphibolites and schists, and phyllites. They have been intruded by 2000Ma Tromaí Suite granitoids. Both the The Gurupi Group and the Maracaçumé Complex has been deformed along the Tentugal Shear Zone.

The Mesoproterozoic Viseu and Igarapé da Areia Formations, comprising mainly continental sandstones and conglomerates, occur in basins controlled by NE-SW faulting. Individual small basins initiated along NW-SE normal and NE-SW strike-slip faults.

Neoproterozoic Ney Peixoto felsic intrusions occur in the west and intrude the Gurupi Group. Main lithologies are granodiorites, monzogranites and syenogranites. The Boca Nova suite is represented by an isolated nepheline syenite intrusion on the western margin of the Gurupi gold province.

The Paleozoic Serra Grande and Piria Formations comprise sandstones, conglomerates, greywackes, shales and siltstones.

For

per

sona

l use

onl

y

PROSPECTUS 89



Figure 5.3.1_1 São Luis Gold Project – Regional Geology

Source: Carta Geológica do Brasil ao Milionésimo, CPRM

The Mesozoic Itapecuru Formation was deposited in a continental environment (alluvial fans, river and lakes), whereas the Cenozoic Barrieras Formation was deposited in two main facies: continental clay-rich sequences deposited under hot, humid conditions, and under a subaqueous marine regime. The Itapecuru Formation contains horizons of conglomeratic sandstones with rounded to subrounded quartz pebbles and rare sandstone or pelite clasts, and may be prospective as a host for detrital gold mineralisation.

The main structure is the Tentugal Shear Zone, a linear tectonic zone about 140km long and 35km wide trending NW to NNW (Figure 5.3.1_1). The internal geometry is lenticular, with a heterogeneous distribution of metamorphic grades. The evolution of this zone is related to an oblique compressive tectonic regime with a sinistral sense of movement and mass transportation from SW to NE. The structure mainly traverses rocks of the Maracaçumé Complex and the Gurupi Group.

For

per

sona

l use

onl

y




5.3.2 Mineralisation

The São Luis Gold Project is in a similar geological environment to other gold camps within the Guyana Shield and the West African craton (Figure 5.3.2_1), where gold mineralisation is mainly structurally controlled within Proterozoic granite-greenstone sequences.

Figure 5.3.2_1

Reconstruction of Pangea Paleocontinent showing Major Gold Deposits in relation to the São Luis Gold Project

Adapted from Klein, 2004


Gold is reported to have been first discovered in the Gurupi region in the 17th century by the “Bandeirantes”, and roughly 225,000oz of gold has been produced by artisanal miners. Modern exploration commenced in the region of the Aurizona project in 1978 and continued through various joint ventures to 1997. Scarce outcrop limited mainly to historic artisanal gold workings, together with poor infrastructure and poor quality regional geophysics ensured that the district did not benefit from modern exploration prior to the mid-2000’s. In 2011 operations commenced the Piaba and Tatajuba deposits. Currently there is significant exploration activity in the region at the Chega Tudo and Cipoeiro, Montes Áureos and Cachoeira gold projects.

The tenements comprising the São Luis Gold Project have never been systematically explored. Regional mapping has been carried out by the Brazilian geological survey (CPRM), and in 2008 they commissioned a new high-resolution airborne magnetic survey covering the Gurupi Gold province.

For

per

sona

l use

onl

y

PROSPECTUS 91




The Gurupi Gold Province hosts several significant gold deposits including Piaba-Tatajuba (3.2Moz), Cipoeiro (1.8Moz), Cachoeira (0.7Moz) and Chega Tudo (0.6Moz). Several other minor gold occurrences are known, for example at Montes Aúreos and Serrinha. All the deposits and occurrences appear to occur within the high magnetic relief terranes which are associated with granite-greenstone stratigraphy.

In 2008, CPRM released a new high-resolution airborne magnetic survey that covered the Gurupi Gold Province. The current boundaries of the overlying sediments, which limited the area of the Proterozoic granite greenstones had been interpreted from older, more regional aeromagnetic data. The new, high resolution aeromagnetic survey has enabled reinterpretation of these boundaries by Paringa, which has increased the potential area of granite greenstones. The new aeromagnetic survey was used by Paringa Resources to delineate seven regional exploration targets (Figures 5.3.1_1 and 5.5_1).

Figure 5.5_1

São Luis Gold Project – Structural Interpretation from Regional Aeromagnetic Data


For

per

sona

l use

onl

y




The Paringa tenements cover a significant strikelength of areas of high magnetic relief interpreted to be Proterozoic granite-greenstone, and overlie the interpreted extension to structures associated with major gold deposits and occurrences. The target areas are similar to those which host other gold deposits within the Gurupi Gold Province and the broader Guyana Shield and the West African craton and therefore can be considered prospective for major gold deposits.

5.6 Proposed Exploration Programmes and Budget

Paringa has proposed a progressive 2 year exploration programme.

The proposed Year 1 programme consists of:

Geological reconnaissance, rock sampling and regional stream-sediment sampling over all tenements. Depending on the results of this phase, the land holding may be reduced;

Infill stream-sediment survey, detailed mapping and systematic rock channel samples and regional soil lines to delineate targets; and

Soil gridding and ground geophysics, including ground magnetics and induced polarisation surveys.

The proposed Year 2 programme consists of:

Phase I diamond drilling consisting of a minimum of 1,500m;

Continuation of stream-sediment and soil sampling programmes; and

Depending on results of Phase 1, extensive ground magnetics and induced polarisation surveys.

The proposed 2-year period exploration programme budget is shown in Table 5.6.2_1.

Table 5.6.2_1 São Luis Gold Project - Proposed Exploration and Evaluation Expenditure


Year 2 (A$)

Total (A$)

Diamond Drilling - 270,000 270,000 Assaying 20,000 45,000 65,000 Field Operations and Vehicles 121,000 121,000 242,000 Surveying - 2,500 2,500 Government Fees 260,000 104,000 364,000 Travel and Accommodation 33,000 33,000 66,000 Orientation Geochemical Surveys 6,500 19,000 25,500 Geophysics 11,000 126,000 137,000 Staff and Contractors 372,000 372,000 744,000 Total $823,500 $1,092,500 $1,916,000

For

per

sona

l use

onl

y

PROSPECTUS 93




The São Luis Gold Project represents an early-stage opportunity located in a prospective geological/structural environment with known gold mineralisation. The main targets comprise linear and circular magnetic highs identified from data collected from the 2008 airborne magnetic survey carried out by the Brazilian Geological Survey. Some of the magnetic features lie concealed by Phanerozoic basin sediments but their amplitudes suggest the cover is shallow.

Coffey Mining considers, the project area is prospective for gold mineralisation and has sufficient merit to warrant systematic exploration. In addition to surface geochemical sampling, geochemical auger drilling should be considered for targets under thin cover.

Coffey Mining considers that the planned exploration programme is appropriate for the opportunity and that the budget is sufficient to achieve the stated objectives.

For

per

sona

l use

onl

y




6 SANTO ANTÔNIO DE PÁDUA GRAPHITE PROJECT

6.1 Location

The Santo Antônio de Pádua Graphite Project is located in northeastern Rio de Janeiro State, about 185km NE of Rio de Janeiro (the state capital), in the southeastern part of Brazil and close to the Atlantic coast (Figure 6.1_1).

Figure 6.1_1

Santo Antônio de Pádua Graphite Project - Location

For

per

sona

l use

onl

y

PROSPECTUS 95



The Santo Antônio de Pádua Graphite Project is easily accessible from Rio de Janeiro along a combination of well-paved highways for a travelling distance of 250km. The largest nearest town is Santo Antônio de Pádua, with 40,000 inhabitants and an excellent infrastructure with banks, hospitals, schools, restaurants, hotels, etc. A railway, linking Ponte Nova (Minas Gerais State) with Macaé port (Rio de Janeiro State), passes through Santo Antônio de Pádua and is currently being used intermittently to transport grain, construction material, equipment and iron ore.

The Project is located in the so-called “Região Norte Fluminense do Estado Rio de Janeiro”, at an average altitude of 930m above the sea level. The region is characterised by small farms that produce agricultural products that are mostly sold in the local markets. The most significant economic activity is related to the exploitation and beneficiation of ornamental stone for use in the construction sector.

The climate is tropical with humid summers and dry winters. Rainfall is approximately 2,400mm per annum. The temperature is mild, averaging about 19°C. In the warmer months, the average temperature is 23°C and the average of the coldest month is 15°C.

6.2 Mineral Tenure

The tenements of the Santo Antônio de Pádua Graphite Project comprise 12 applications for exploration licenses for a total of 22,461.06ha, as summarised in Table 6.2_1 and shown in Figure 6.2_1. The applications have been made in the name of Paringa Brazil. The legal status of the assets in which Paringa has an interest has not been independently verified by Coffey Mining. The present status of the tenements is based on information provided by Paringa and its Brazilian solicitors and the report has been prepared on the assumption that the project will prove to be lawfully accessible for exploration and development.



The Project lies within the Mantiqueira Province, a highly complex structural zone deformed during the Brasília Orogenic Cycle during the Neoproterozoic/Early Paleozoic (900-480Ma). The Mantiqueira Province is the host to all graphite production in Brazil.

The tenements are within the Juiz de Fora/Paraiba do Sul domain which is part of the Araçuaí Orogen. This domain is an extensive NE-trending belt in the central-north and western part of Rio de Janeiro State, sub-parallel to the Rio Paraíba do Sul shear corridor. It consists of amphibolite and granulite facies kinzigitic gneisses, schists, quartzites and marbles belonging to the Paraiba do Sul Complex. These are, intercalated with Paleoproterozoic rocks represented by orthogranulites and tonalitic orthogneisses of the Juiz de Fora Complex and granitic to granodioritic orthogneisses of the Quirino Suite. The Juiz de Fora/Paraiba do Sul domain is in contact to the northwest with the Mantiqueira/Andrelândia domain, along the Rio Preto shear zone, and to southeast with the Serra do Mar domain, along the Paracambi shear zone (Figure 6.3.1_1).

For

per

sona

l use

onl

y


Cof

fey

Min

ing

Pty

Ltd

Par

inga

Res

ourc

es IG

R –

MIN

EWP

ER

0103

5AA

Pag

e: 5

2 In

depe

nden

t Geo

logi

st's

Rep

ort –

25

Sep

tem

ber 2

012

Tabl

e 6.

2_1

Sant

o An

tôni

o de

Pád

ua G

raph

ite P

roje

ct -

Tene

men

t Sum

mar

y M

unic

ipal

ity

DN

PM P

roce

ss N

o.

Stag

e M

iner

al

Appl

ican

t Si

ze (h

ecta

res)

Ex

piry

Dat

e P

irape

tinga

83

1.80

9/20

12

App

licat

ion

for E

xplo

ratio

n Li

cens

e G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,92

2.82

pe

ndin

g

Mira

cem

a 89

0.38

7/20

12

App

licat

ion

for E

xplo

ratio

n Li

cens

e G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,76

6.68

pe

ndin

g 89

0.38

8/20

12

App

licat

ion

for E

xplo

ratio

n Li

cens

e G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,89

9.76

pe

ndin

g 89

0.38

9/20

12

App

licat

ion

for E

xplo

ratio

n Li

cens

e G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,67

3.24

pe

ndin

g

San

to A

ntôn

io d

e P

ádua

890.

390/

2012

A

pplic

atio

n fo

r Exp

lora

tion

Lice

nse

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

960.

92

pend

ing

890.

391/

2012

A

pplic

atio

n fo

r Exp

lora

tion

Lice

nse

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

979.

63

pend

ing

890.

392/

2012

A

pplic

atio

n fo

r Exp

lora

tion

Lice

nse

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

884.

35

pend

ing

890.

393/

2012

A

pplic

atio

n fo

r Exp

lora

tion

Lice

nse

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

785.

00

pend

ing

San

to A

ntôn

io d

e P

ádua

/ P

irape

tinga

89

0.39

4/20

12

App

licat

ion

for E

xplo

ratio

n Li

cens

e G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,88

7.71

pe

ndin

g 89

0.39

5/20

12

App

licat

ion

for E

xplo

ratio

n Li

cens

e G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,90

7.12

pe

ndin

g P

irape

tinga

/ Est

rela

Dal

va

890.

396/

2012

A

pplic

atio

n fo

r Exp

lora

tion

Lice

nse

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

881.

47

pend

ing

Est

rela

Dal

va

890.

397/

2012

A

pplic

atio

n fo

r Exp

lora

tion

Lice

nse

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

912.

36

pend

ing

Tota

l 22

,461

.06

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

is th

e fo

rmer

nam

e of

Par

inga

Bra

zil

For

per

sona

l use

onl

y

PROSPECTUS 97



Figure 6.2_1 Santo Antônio de Pádua Graphite Project - Tenement Map

For

per

sona

l use

onl

y




Figure 6.3.1_1 Tectonic-Magmatic Domains of Rio de Janeiro State and Adjacent Areas

Source: Programa Levantamento Geológicos Básicos do Brasil – Geologia do Estado do Rio de Janeiro, CPRM


There are five different stratigraphic units locally overlain by Quaternary alluvial deposits. These units belong to the Juiz de Fora Domain with ages ranging from Paleoproterozoic (Juiz de Fora and Quirino Complexes) to Neoproterozoic (Andrelândia Group). All units are intruded by the Paleozoic Serra do Bonfim intrusive suite.

The Quirino Complex occurs in the southwest and consists of hornblende-biotite migmatitic gneisses with enclaves of mafic and ultramafic rocks, mainly tremolitites and hornblendites (Figure 6.3.2_1).

The Juiz de Fora Complex is divided into a Granulite Unit and a Charnockite Unit. The Granulite Unit consists of orthogranulites with a variable composition including enderbites, charno-enderbites, charnockites and gabbroic rocks. The Charnockite Unit comprises mylonitic and retrogressed charnockites with variable colours ranging from green to pinkish. The strongly mylonitised zones are being exploited for ornamental stone and are locally named “pedra madeira” (“wood stone”). For

per

sona

l use

onl

y

PROSPECTUS 99



Figure 6.3.2_1 Local Geology of Santo Antônio de Pádua Graphite Project showing Graphite Occurrences


The Andrelândia Group which is the most significant host of graphite and manganese occurrences, occurs as several belts intercalated with both complexes as a result of folding and thrusting. It consists of banded garnet-biotite gneisses with intercalations of sillimanite-garnet-biotite gneisses, quartzites, amphibolites, calc-silicate rocks and ferruginous exhalite horizons. The sillimanite-garnet-rich gneisses are similar to those found in the Kerala Belt in India, and host the graphite-manganese oxide mineralisation within the project area. There are over 60km of strike of the Andrelândia Group within the project area.

The Serra do Bonfim Suite is represented by hornblende-biotite gneisses with textures varying from porphyritic to mylonitic or ultramylonitic. These rocks are also exploited for ornamental stone and are locally known as “pedra olho de pombo” (“pigeon´s eye stone”).

For

per

sona

l use

onl

y




6.3.3 Graphite Mineralisation

Thirty-five manganese-rich belts have been found in the southeastern part of Brazil; some of these are associated with iron and others with graphite. The origin of these volcano-sedimentary sequences is ascribed to a transgressive marine event in which iron was concentrated at the base of the sequences, whereas manganese was concentrated in the intermediate portion and graphite at the top of the sequences.

The Santo Antônio de Pádua Graphite Project area is located along Belt 9 (Suszczynski, 1975; Figure 6.3.3_1) and the graphite mineralisation has been found disseminated within the Andrelândia Group sillimanite-garnet and garnet-biotite gneisses, as well as in disseminations and veins in manganese-bearing gondite layers, where weathering has produced an enrichment in manganese oxides (Figure 6.3.3_2).

Literature researches and geological reconnaissance were carried out by Paringa over previously delineated graphite occurrences distributed along parallel NE-SW linear trends. The graphitic bodies form lenses which are mainly hosted by the sillimanite-garnet-rich gneissic belt containing rocks of the Andrelândia Group (Figure 6.3.2_2). In general, individual graphite-bearing gondite lenses range 1-3m wide, but may form zones 10-15m wide. The graphitic bodies dip about 50°-60°SE. The disseminated graphite in the gondites tends to occur as fine-grained flakes.


The Santo Antônio de Pádua Graphite Project area does not appear to have had any previous exploration and Paringa is the first company exploring for graphite on the graphite-bearing trend. The Brazilian Geological Survey and the University of the State of Rio de Janeiro have been conducting regional to semi-detailed research including an airborne geophysical survey, a base-metal stream sediment survey, and regional and semi-detailed mapping. Guimarães (2011) highlighted the potential for graphite mineralisation in the area based on field mapping and petrographic studies. However, the grades of the mineralisation were never evaluated.

In July 2012, Paringa carried out geological reconnaissance in two sectors of the 65km-long exploration property. This phase included rock descriptions and collection 18 rock grab samples for chemical analysis.

Assays indicated that total carbon contents range from 3.14 to >15.0% C in eight samples (Figure 6.4_1). Most of these are related to gondites, except for one which is associated with disseminated graphite in garnet-rich gneiss, reporting 7.62% C, located immediately outside the Paringa tenements. Elevated manganese results are typically associated with graphite in gondites, with values ranging 7.79-26.2% Mn.

For

per

sona

l use

onl

y

PROSPECTUS 101



Figure 6.3.3_1 Main Manganese and Graphite Belts in Southeastern Brazil

(after Suszczynski, 1975)

For

per

sona

l use

onl

y




Figure 6.3.3_2 Santo Antônio de Pádua Graphite Project – Lithologies

a) Graphite-Bearing Aluminous Gneiss

b) 1m-thick Graphite-Manganese Oxide Vein


F

or p

erso

nal u

se o

nly

PROSPECTUS 103



Figure 6.4_1 Santo Antônio de Pádua Graphite Project – Carbon (%) Assays from Reconnaissance Sampling



Currently, the Santo Antônio de Pádua Graphite Project is at an early stage but indications are that there is good potential for locating crystalline flake graphite mineralisation. Flake graphite deposits may be associated with alumina-rich paragneisses, as in the case of the Andrelândia Group, which occurs in two belts within the property and hosts the majority of the known graphite occurrences in the region. The Andrelãndia Group has undergone high-grade metamorphism (granulite facies) which can generate high-quality flake graphite.

The large number of graphite occurrences and their mode of occurrence within the project suggest the presence of high-tonnage, low-grade disseminated mineralisation. In addition, vein-type graphite has also being identified within the property, indicating potential for low-tonnage, high-grade crystalline lump and/or flake mineralisation.

For

per

sona

l use

onl

y




6.6 Proposed Exploration Programmes and Budgets

Paringa has proposed a two-phase exploration programme for the Santo Antônio de Pádua Graphite Project as outlined below.

Year 1 planned exploration activity comprises:

Geological mapping on a semi-detailed scale in order to understand the structural control and better delineate the distribution of the mineralised horizons. This activity will be accompanied by systematic rock-chip and channel sampling to delineate the high-grade zones. The potential for manganese in the weathered zone should be tested concurrently.

A preliminary petrographic study should be carried out to characterise the main lithologies and the nature of the graphite mineralisation.

Trenching will be carried out to sample the mineralised zones, as well as, to determine their true thickness.

Specific analysis for graphitic carbon and organic carbon should be carried out on zones of high total carbon results to determine the proportion of both types.

Areas with low potential will be relinquished based on the results obtained during the Year 1 programme.

Depending upon the results obtained in Year 1, Year 2 exploration would comprise:

Preliminary metallurgical testwork in order to characterise the different grain size fractions and the concentration factors of the graphite mineralisation.

An IP survey over selected mineralised zones, to determine the dimensions of the mineralised bodies and provide additional targets for a drilling programme.

A preliminary diamond drilling programme, of approximately 800m, mainly using HQ diameter, to provide enough material for further metallurgical testwork. The drilling will be designed to test the mineralisation down to 100m vertically from surface.

Table 6.6.2_1 lists the proposed budgets.

Table 6.6.2_1 Santo Antônio de Pádua Graphite Project

Proposed Exploration and Evaluation Expenditure


Year 2 (A$)

Total (A$)

Diamond Drilling - 115,000 115,000 Assaying 6,500 6,500 13,000 Field Operations and Vehicles 26,500 26,500 53,000 Surveying - 1,000 1,000 Geophysics (IP survey) - 6,000 6,000 Trenching 3,000 - 3,000 Government Fees 24,000 24,000 48,000 Metallurgy and Mineralogy - 12,000 12,000 Travel and Accomodation 5,000 5,000 10,000 Staff and Contractors 74,000 74,000 148,000 Total $139,000 $270,000 $409,000

For

per

sona

l use

onl

y

PROSPECTUS 105




The Santo Antônio de Pádua Graphite Project comprises a large exploration area situated on a high-grade metamorphic terrain hosting a large number of graphite occurrences. The thickness of individual horizons of mineralisation ranges up to 3m in thickness within zones up to 15m thick and preliminary analysis indicate total carbon grades of 3% to 15%. The carbon distribution between graphitic and other forms has yet to be established.

Coffey Mining considers that the Santo Antônio de Pádua Graphite Project warrants further exploration to establish the nature and economic potential of the known graphite mineralisation. Coffey Mining considers that the planned exploration programmes and proposed budgets are consistent with the nature of the opportunity and that the budgets are sufficient to achieve the stated initial objectives.

For

per

sona

l use

onl

y




7 SÃO FIDÉLIS GRAPHITE PROJECT

7.1 Location

The São Fidélis Graphite Project is located in northern Rio de Janeiro State, about 190km from Rio de Janeiro, in southeastern Brazil and close to the Atlantic coastline (Figure 7.1_1).

Figure 7.1_1

São Fidélis Graphite Project - Location

The São Fidélis Graphite Project can be easily accessed from Rio de Janeiro along two well-paved highways, BR-101 and RJ-116, for a total journey of 291km. (Figure 7.1_1). The biggest nearby town is São Fidélis, with 37,000 inhabitants and an excellent infrastructure with banks, hospitals, schools, restaurants, and hotels. A railway that links Ponte Nova (Minas Gerais State) with the port at Macaé (Rio de Janeiro State) passes through São Fidélis and is used intermittently only to transport grain, construction materials, equipment and ore (mainly iron ore). For

per

sona

l use

onl

y

PROSPECTUS 107



The São Fidélis Graphite Project is located in the “Região Norte Fluminense do Estado Rio de Janeiro”, at an average altitude of 300m above the sea level. The region is characterised by small farms whose produce is mostly sold at local markets. The climate is tropical humid summers and dry winters. Rainfall is approximately 2,400mm per annum. The annual average temperature is about 22.7 C. In warmer months, the average temperature is 23 C and the average of the coldest month is 15 C.

7.2 Mineral Tenure

The São Fidélis Graphite Project comprises two applications for exploration licenses for a total of 3,591.48 hectares (Table 7.2_1; Figure 7.2_1). The applications were made in the name of Paringa Brazil. Coffey Mining has not independently validated the status of mineral title. The legal status of the tenements in which Paringa has an interest has not been independently verified by Coffey Mining. The present status of the tenements is based on information provided by Paringa and its Brazilian solicitors and the report has been prepared on the assumption that the project will prove to be lawfully accessible for exploration and development.



The São Fidélis Graphite Project lies within the Mantiqueira Province, a highly complex structural zone deformed during the Brasília Orogenic Cycle during the Neoproterozoic/Early Paleozoic (900-480Ma).

The tenements are within the Juiz de Fora/Paraiba do Sul domain which is part of the Araçuaí Orogen. This domain is an extensive NE-trending belt in the central-north and western part of Rio de Janeiro State, sub-parallel to the Rio Paraíba do Sul shear corridor. It consists of kinzigitic gneisses, schists, quartzites and marbles belonging to the Paraiba do Sul Complex, metamorphosed at amphibolite and granulite facies, tectonically intercalated with Paleoproterozoic rocks represented by orthogranulites and tonalitic orthogneisses of the Juiz de Fora Complex and granitic to granodioritic orthogneisses of the Quirino Suite. The Juiz de Fora/Paraiba do Sul domain is in contact to the northwest with the Mantiqueira/Andrelândia domain, along the Rio Preto shear zone, and to southeast with the Serra do Mar domain, along the Paracambi shear zone (Figure 6.3.1_1).

For

per

sona

l use

onl

y


Cof

fey

Min

ing

Pty

Ltd

Par

inga

Res

ourc

es IG

R –

MIN

EWP

ER

0103

5AA

Pag

e: 6

4 In

depe

nden

t Geo

logi

st's

Rep

ort –

25

Sep

tem

ber 2

012

Tabl

e 7.

2_1

São

Fidé

lis G

raph

ite P

roje

ct -

Tene

men

t Sum

mar

y M

unic

ipal

ity

DN

PM P

roce

ss N

o.

Stag

e M

iner

al

Appl

ican

t Si

ze (h

ecta

res)

Ex

piry

Dat

e S

ão F

idél

is

890.

400/

2012

U

nder

App

licat

ion

Gra

phite

W

aven

et In

tern

atio

nal M

iner

ação

Ltd

a 1,

956.

93

pend

ing

São

Fid

élis

89

0.40

1/20

12

Und

er A

pplic

atio

n G

raph

ite

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

1,63

4.55

pe

ndin

g To

tal

3,59

1.48

Wav

enet

Inte

rnat

iona

l Min

eraç

ão L

tda

is th

e fo

rmer

nam

e of

Par

inga

Bra

zil

For

per

sona

l use

onl

y

PROSPECTUS 109



Figure 7.2_1 São Fidélis Graphite Project - Tenement Map

Paringa, 2011

For

per

sona

l use

onl

y





The São Fidélis Graphite Project area is underlain by four Neoproterozoic lithological units with ages ranging from about 900Ma-570Ma: the northern tenement by the São Fidélis Group and the Serra do São Pedro Complex, the southern tenement by the São Fidélis Group and the Cordeiro and Desengano suites. Known graphite mineralisation is mainly hosted by the São Fidélis Group and, locally, the Cordeiro suite and a number of inactive graphite mines occur within the Project tenements (Figure 7.3.2_1).

The São Fidélis Group is the oldest unit and consists of garnet-biotite-sillimanite quartzofeldspathic gneiss, locally with graphite-rich domains. Intercalations of calc-silicate gneiss, amphibolite and quartzite are commonly present.

The Serra do São Pedro Suite is represented by hornblende-biotite mesocratic orthogneisses with porphyritic textures and is locally migmatitic, with garnet-rich leucosomes. Xenoliths of gabbroic rocks are commonly observed.

The Cordeiro Suite is composed by medium- to coarse-grained garnet-biotite granitic gneiss, with equigranular texture. Enclaves of calc-silicate rocks are common and xenoliths of amphibolite occur locally.

The Desengano Suite consists of S-type garnet-muscovite-biotite-bearing granites, with coarse-grained granoblastic to porphyritic textures and strong strike-slip fabrics. Locally, garnet-orthopyroxene-bearing charnockitic domains and patches are found. Xenoliths and restites of partially-melted paragneiss occur throughout the unit.

7.3.3 Graphite Mineralisation

The São Fidélis Graphite Project is located along Suszczynski’s (1975) belts 5 and 6 (Figure 6.3.3_1) where the graphite mineralisation is associated with graphite schists and graphite-garnet-biotite-sillimanite gneisses belonging to the São Fidélis Group.

According to the Brazilian Geological Survey, there are four abandoned graphite mines (Saudade, São Benedito and Serra do Colégio 1 and 2) and two graphite occurrences in the region. Of these, three abandoned mines (Saudade, São Benedito and Serra do Colégio 1) and one occurrence (Ribeirao das Flores) lie within Paringa´s tenements (Figure 7.3.2_1).

For

per

sona

l use

onl

y

PROSPECTUS 111



Figure 7.3.2_1 São Fidélis Graphite Project – Local Geology

Source: Carta Geológica 1:100.000 Folha São Fidélis, CPRM

For

per

sona

l use

onl

y




7.4 Exploration and Exploitation History

The São Fidélis Graphite Project has seen no modern systematic exploration. The information available about the historical mines is limited and relies on very old reports and technical notes. These suggest that the graphite at São Fidélis was of high quality because of its soft but highly crystalline nature.

The São Fidélis graphite was exploited by underground mining during World War I and 194t are recorded as being exported from 1915 to 1918. Underground mining was interrupted during the war.

At the Saudade Mine, the graphite mineralisation occurred as parallel veins oriented along the foliation and hosted by gneissic rocks. The graphite was described as very high quality Ceilão (or Sri Lanka)-type crystalline graphite, with lamellar structure and locally containing a small amount of fibrous graphite. Historical data indicate that the run of mine production grade was in the order of 35% C to 40% C with more selective production having grades around 60-70% C, locally reaching 76% C, as reported by the Brazilian Mining Department (“DNPM”) in an annual report dated from 1942.

In 1942, the DNPM tried to evaluate the Saudade and Serra do Colegio mines by trying to re-open the existing underground galleries. Unfortunately, a heavy rainy season flooded and partially collapsed the workings causing an interruption to the exploration.

To date, Paringa has not conducted any exploration within the project area.


The São Fidélis Graphite Project is an early-stage project currently with limited information available; however, the presence of old graphite mines and the documentation about the good quality of the graphite mineralisation and high carbon grades make the project attractive. Moreover, the project is well located with respect to infrastructure and transport.

7.6 Proposed Exploration Programme and Budget

Paringa plans to complete systematic exploration across the São Fidélis Graphite Project tenements in two phases, as listed below.

Year 1 exploration comprises:

Geological and structural mapping over the known graphite mines and occurrences and their respective extensions along the strike. This activity will be accompanied by systematic rock-chip and channel sampling to evaluate the graphite content;

Specific analysis for graphitic carbon and organic carbon should be carried out on zones of high total carbon results to determine the proportion of both types;

Regional mapping and rock sampling along the whole property and potential extension;

For

per

sona

l use

onl

y

PROSPECTUS 113



A preliminary petrographic study to characterise the main lithologies and the graphite mineralisation (grain size and morphology);

Trenching to expose and test the mineralised zones and to determine their true thickness and their lateral continuity; and

Areas with low potential will be relinquished based on the basis of results obtained during Year 1.

Depending upon the results obtained in Year 1, the Year 2 exploration programme would consist of:

Preliminary metallurgical testwork to characterise the different grain size fractions and the concentration factors of the graphite mineralisation;

An induced polarisation survey over the main zones to determine the 3D dimensions of the mineralised bodies and provide support for a drilling programme; and

A preliminary diamond drilling programme of approximately 700m, mainly using an HQ diameter to provide enough material for metallurgical testworks, to test the mineralisation down to 100m from the surface.

The proposed budget for Year 1 and Year 2 is shown in Table 7.6.2_1.

Table 7.6.2_1 São Fidélis Graphite Project - Proposed Exploration and Evaluation Expenditure


Year 2 (A$)

Total (A$)

Diamond Drilling - 115,000 115,000 Assaying 6,500 5,500 12,000 Field Operations and Vehicles 26,500 26,500 53,000 Surveying - 1,000 1,000 Geophysics 12,000 12,000 Trenching 2,000 - 2,000 Government Fees 4,000 4,000 8,000 Metallurgy and Mineralogy - 12,000 12,000 Travel and Accommodation 5,000 5,000 10,000 Staff and Contractors 74,000 74,000 148,000 Total $118,000 $255,000 $373,000


Coffey Mining considers that the São Fidélis Graphite Project is an early stage exploration opportunity with recorded graphite production from a number of historical mines. Historical records suggest the selectively mined graphite mineralisation was of high quality. The Project warrants further exploration to establish the nature and economic potential of the known graphite mineralisation and the potential for discovery of additional graphite deposits. Coffey Mining considers that the planned exploration programmes and proposed budgets are consistent with the nature of the opportunity and that the budgets are sufficient to achieve the stated initial objectives. For

per

sona

l use

onl

y




8 ALTERNATE APPLICATION OF FUNDS

In the event that the São Luis Gold Project, Santo Antônio de Pádua Graphite Project and São Fidélis Graphite Project license applications described in Sections 5, 6 and 7 of this report are not granted within the first two years following listing, the funds allocated to those projects will used to:

1. Carry out reconnaissance stream sediment geochemical surveys, geological mapping and outcrop sampling at to enable rapid prioritisation of activities once the tenement applications are granted.

2. Complete additional drilling at Minaçu Gold Project to increase resource confidence and enable a broader and more comprehensive drill test program of known workings and targets. High level metallurgical testwork and mine planning will also be started to underpin scoping level project economic assessments.

3. Increase the focus on developing a strong project pipeline targeting Brazil-wide high priority opportunities on granted tenure including but not restricted to, the existing option agreement on Riacho de Santana graphite, and the gold-copper Gentio de Ouro tender.

For

per

sona

l use

onl

y

PROSPECTUS 115



9 PRINCIPAL SOURCES OF INFORMATION

Alkmin, F.F., Pedrosa-Soares, A.C., Noce, C.M. & Cruz, S.C.P. (2007). Sobre a Evolução Tectônica do Orógeno Araçuaí-Congo Ocidental. GEONOMOS 15(1), p.25-43.

Amazônia Mineração Ltda, (August 2004). Buracão Gold Property. Summary Information Report Prepared on Behalf of Osisko Exploration Ltd., 12pp.

Arantes, D. (Julho 2004). Relatório Parcial Integrado de Pesquisa Mineral, Fazenda Cerigela, Projeto Buracão. Titular: Josefa de Castro Fonseca. Processo: DNPM.860.760/2001, 76pp.

Arantes D. & Carvalho M.T.N. (July 2005). Summary Information Report: Buracão Project, 41pp.

Arantes D. (Fevereiro 2007). Relatório Parcial Integrado de Pesquisa Mineral Projeto Buracão.liança Ltda. Processos: DNPMs 860.285/2004 e 860.286/2004, 26pp.

Barbosa, M.S. (Março 2009). Petrografia das Unidades de Mapeamento da Folha São Fidélis (1:100.000), Centro-Norte do Estado do Rio de Janeiro. Universidade Federal Rural do Rio de Janeiro, Instituto de Agronomia, Departamento de Geociências, Curso de Geologia, 48pp.

Batista Filho, J. & Tanaka, M.D. (2002). Considerações geológicas e Sobre o Parque Produtor de Rochas Ornamentais no Município de Santo Antônio de Pádua-RJ. Anuário do Instituto de geociências – UFRJ, Volume 25, p.68-84.

Bernardi, A.V. (Setembro 1985). Avaliação de Potencial Aurífero. Buracão – Minaçu – Goiás. GEOS, 15pp.

Bettencourt, J.S., Borges, W.R. & Koritiake, M. (1991). The cachoeira gold deposit, Gurupi belt, Para Brazil: Geological setting, structure and mineralisation – A preliminary report. In: E.A. Ladeira (ed.) BRAZIL GOLD ’91, p.203-208. Balkema, Rotterdam.

Bizzi, L.A., Schobbenhaus, C., Vidotti, R.M. & Gonçalves J.H, (2003). Geologia, Tectônica e Recursos Minerais do Brasil, Parte II – Tectônica. CPRM, p.292-334.

Campos, J.E.G. (Abril 2006). Relatório Técnico de Viagem, Projeto Buracão, Exploração de Ouro. Prepared for Amazônia Serviços Técnicos em Mineração, 24pp.

Cordani, R. (Janeiro 2007). Considerações a Respeito da Geofisica do Projeto Buracão. Prepared by Reconsult Geofísica, 6pp.

CPRM. (Agosto 2011). Catálogo Temático de Produtos. Levantamentos Aerogeofísicos, Volume 1, 104pp.

Delgado, I. De M., Pedreira, A.J. & Thorman, C.H. 1994. Geology and mineral resources of Brazil: A review. International Geology Review 36, p.503-544.

Guevara, O. (2010). Informe Final Proyecto Buracao, 27pp.

Guimarães, P.V, (2011). Contexto Geológico–Geotectônico da Faixa Manganesífera – Grafitosa localizada entre Itaperuna (RJ) e Volta Grande (MG). Dissertação (Mestrado em Análise de Bacias e faixas Móveis). Universidade do Estado do Rio de Janeiro, Centro de Tecnologia e Ciências, Faculdade de Geologia, 111pp. For

per

sona

l use

onl

y




Klein, E.L. (2004). Evolução Geológica Pré-Cambriana e aspectos da Metalogênese do Ouro do Cráton São Luís e do Cinturão Gurupi, NE-pará / NW-Maranhão, Brasil – Como requisito parcial à obtenção do Grau de Doutor em Ciências na Área de GEOQUÍMICA E PETROLOGIA, Universidade Federal do Pará Centro de Geociências 83pp

Klein, E.L. (2011). Gold Metallonegy in the Gurupi Belt, Brazil. CNPq – Brazilian Council for Technological and Scientific Development, projects no 481.189/2009-2 and 306.723/2009-3, 3pp.

Klein, E.L., Moura, C.A.V., Krymsky, R.S. & Griffin, W.L. (2005). The Gurupi Belt, northern Brazil: Lithostratigraphy, geochronology and geodynamic evolution. Precanbrian Research 141, p.83-105.

Leroux, D.C. (December 1997). Geological Report on the Reconnaissance Exploration Program of the Buracão Property – Tocantins and Goiás States, Brazil. A.C.A. Howe International Limited, Report no. 794. Prepared for Ourominas Minerals Inc., 76pp.

Lobato, E. (Setembro 2009). Relatório Técnico 41: Perfil da Grafita. Projeto ETAL – Projeto de Assistência Técnica ao Setor de Energia. J.Mendo Consultoria, 33pp.

Mandetta P. (Julho 2004). Mineralizações Auríferas do Buracão: Avaliação do Potencial Econômico, 13pp.

Mandetta P. (Julho 2003). Mineralizações de Ouro do Projeto do Buracão, Estado do Tocantins, 3pp.

Mandetta P. (May 1994). Buracão Gold District: Preliminary Evaluation.Prepared for Madison do Brasil, 8pp.

Mandetta, P. (Agosto 1994). Relatório de Campo Projeto Buracão. Prepared for Madison do Brasil, 7pp.

Mandetta P. (August 1994). Buracão Property, State of Tocantins. Report II, prepared for Madison do Brasil, 5pp.

Martini S.L., Rayol A. & Silva Junior F.H. (Dezembro 2006). Relatório Trimestral de Atividades, Outubro a Dezembro 2006, Projeto Buracão. Mineração Nova Aliança Ltda., 29pp.

Martini, S.L., Tschiedel, M.W., Matsui J & Carvalho M.T.N. (Abril 2007). Projeto Buracão - Relatório Final de Atividades, Amazônia Mineração Ltda, 113pp

Meneguesso, G. (1985). Projeto Minaçu: Trabalhos de Pesquisa nas Áreas da Mineração Cerigela Ltda, 30pp.

Moura, C.A.V., Abreu, F.A.M., Klein, E.L., Palheta, E.S.M. & Pinheiro, B.L.S. (undated). Geochonology of the São Luis Craton and the Gurupi Belt, Brazil. Short Papers – IV South American Symposium on Isotope Geology, p.225-228.

Nakai-Lajoie, P. & Clow, G.G. (February 2011). Technical Report on the Cachoeira Project, Pará State, Brazil. National Instrument 43-101 Technical Report prepared for Luna Gold Corp., 233pp.

For

per

sona

l use

onl

y

PROSPECTUS 117



Nicholson, G.E. & Mandetta P. (December 1994). Summary Geological Report on The Buracão Project – State of Tocantins and Goiás – Brazil. Prepared for Madison do Brasil Consultoria e Participação Ltda., 13pp.

Nogueira, J.R., Tupinambá M., Silva, L.G.E., Duarte, B.P., Miranda, A., Valladares, C.S., Heilbron, M., Guimarães, P.V., Gontijo-Pascutti, A.H., Guia, C., Magalhães, D., Queiroz, L., Silva, F.L., Palermo, N., Pereira, R.M. & Meneses, P.T. (Novembro 2009). Mapa Geológico da Folha Santo Antônio de Pádua SF 23-X-D-VI, Escala 1:100.000. Programa Geologia do Brasil, CPRM & UERJ.

Nogueira, J.R., Tupinambá M., Silva, L.G.E., Duarte, B.P., Miranda, A., Valladares, C.S., Heilbron, M., Guimarães, P.V., Gontijo-Pascutti, A.H., Guia, C., Magalhães, D., Queiroz, L., Silva, F.L., Palermo, N., Pereira, R.M. & Meneses, P.T. (Novembro 2009). Mapa Geológico da Folha Itaperuna SF 24-V-C-I, Escala 1:100.000. Programa Geologia do Brasil, CPRM & UERJ.

Nogueira, J.R., Tupinambá M., Silva, L.G.E., Duarte, B.P., Miranda, A., Valladares, C.S., Heilbron, M., Guimarães, P.V., Gontijo-Pascutti, A.H., Guia, C., Magalhães, D., Queiroz, L., Silva, F.L., Palermo, N., Pereira, R.M. & Meneses, P.T. (Novembro 2009). Mapa Geológico da Folha São Fidélis SF 24-V-C-IV, Escala 1:100.000. Programa Geologia do Brasil, CPRM & UERJ.

Oliveira, A.I., (1945). Relatório da Diretoria 1942, Boletim n.74. Departamento Nacional da Produção Mineral – Divisão de Fomento da Produção Mineral, 300pp.

Pastana, J.M.N. (2001). Programa Levantamentos Geológicos Básicos do Brasil – PLGB: Turiaçu, Folha SA-23-V-D e Pinheiro, Folha SA-23-Y-B. Estados do Pará e Maranhão. Escala 1:250.000. CPRM/DIEDIG/DEPAT, 160pp.

Rayol, A.C., Silva Junior, F.H., Tchisdel, M.W., Carvalho, M.T.N. & Amaral, U.C. (Agosto 2006). Relatório Tecnico de Atividades Fase I-Estágio I e Programação de Sondagem Proposta – Estágio II, Projeto Buracão. Mineração Nova Aliança Ltda, 62pp.

Rochefort, G, Vicencio, S. (Enero1996). Evaluacion Geologica Proyecto Buracão, Brasil. EGM Servicios Ltda for Placer Dome (Brasil) Empreendimentos Ltda., 18pp.

Sampaio, J.A., Andrade, M.C., Paiva, P.R.P. & Dultra, A.J.B. (Dezembro 2005). Rochas e Minerais Industrias, Grafita – Capitulo 22. CETEM-Centro de Tecnologia Mineral, p.471-488.

Santos, T.M.B. (2008). Petrologia, Geoquímica e Termocronologia das Rochas Granulíticas do Sector São Fidelis – Santo Antônio de Pádua (Zona Central da faiza Ribeira, SE do Brasil). Universidade de Lisboa, Faculdade de Ciências, Departamento de Geologia, 235pp.

Silva, L.C. & Cunha, H.C.S. (2001). Geologia do Estado do Rio de Janeiro: texto explicativo do mapa geológico do Estado do Rio de Janeiro. Programa Levantamentos geológicos Básicos do brasil. CPRM- Serviço Geológico do Brasil, 2ª edição, 88pp

Silva, L.C., McNaughton, N.J., Armstrong, R., Hartmann, L.A. & Fletcher. et alii (20054). The Neoproterozoic Mantiqueira Province and Its African Connections: A Zircon-based U-Pb Geochronologic Subdivision for the Brasiliano/Pan-African Systems of Orogens. Precambrian Research 136, p.203-240. For

per

sona

l use

onl

y




Simandl, G.J. & Kenan, W.M. (1997). Microcrystalline Graphite. Geological Fieldwork, British Columbia Ministry of Employment and Investment, Paper 1998-1, p.240-1 to 240-3.

Simandl, G.J. & Kenan, W.M. (1997). Crystalline Flake Graphite. Geological Fieldwork, British Columbia Ministry of Employment and Investment, Paper 1998-1, p.24P-1 to 24P-3.

Simandl, G.J. & Kenan, W.M. (1997). Vein Graphite in Metamorphic Terrains. Geological Fieldwork, British Columbia Ministry of Employment and Investment, Paper 1998-1, p.24Q-1 to 24Q-3.

Simões, L.S.A. (Novembro 2006). Relatório Sobre a Geologia Estrutural da Região do Buracão, 19pp.

Suszczynski, E.F, (1975). Os Recursos Minerais Reais e Potenciais do Brasil e sua Metalogenia, 536pp.

Teixeira, A.S. (Novembro 2011). Relatório Parcial de Pesquisa. Titular: Taiza Santos Fonseca. Processo: DNPM.864.466/2008, 90pp.

Tupinanbá, M., Heilbron, M., Duarte, B.P, Nogueira,J.R., Valladares, C., Almeida, J., Silva, L.G.E., Medeiros, S.R., Almeida, C.G., Miranda, A., Ragatky, C.D., Mendes, J. & Ludka, I. (2007). Geologia da Faixa Ribeira Setentrional: Estado da Arte e Conexões com a Faixa Araçuaí. GEONOMOS 15(1), p.67-79.

Wallis, C.S. & Lacroix, P.A. (December 2006). Technical Report on Piaba Gold Project. National Instrument 43-101 Technical Report prepared for Luna Gold Corp., 93pp.

For

per

sona

l use

onl

y

PROSPECTUS 119



10 GLOSSARY

$M Million dollars

% Percent

-80 mesh sampling A method of stream sediment or soil sampling which involves the collection of sieved material less than 180 microns in diameter.

-80# Material fraction passing a screen size equivalent to approximately 80 apertures per inch, equating to an aperture size of 180μm.

aeromagnetic survey A survey undertaken by helicopter or fixed-wing aircraft for the purpose of recording magnetic characteristics of rocks by measuring deviations of the earth’s magnetic field.

airborne geophysical data Data pertaining to the physical properties of the earth’s crust at or near surface and collected from an aircraft.

alluvium Silt, sand and gravel material, transported and deposited by a river.

alteration Change in mineral and chemical composition of rock, commonly brought about by reactions to weathering or to hydrothermal solutions.

amphibolite A metamorphic crystalline rock consisting mainly of amphibole and some plagioclase.

amphibolite facies Conditions of moderate to high temperatures (450 C to 700 C) during regional metamorphism.

anomalous An area where exploration has revealed results higher (or sometimes lower) than the local background level.

anticline A fold in rocks in which strata dip in opposite directions away from the central axis and who core contains older rocks.

arc, volcanic arc Chain or belt of islands or mountains generated by volcanic activity.

Archean The oldest rocks of the Precambrian era, older than about 2,500 million years before the present.

arkose A sedimentary rock, typically sandstone, predominantly composed of grains of quartz and feldspar.

arsenopyrite An iron and arsenic sulphide mineral, FeAsS.

artisanal workings Mine workings operated on a primitive level by local people. Mine workings operated on a primitive level by local inhabitants.

As Chemical symbol for arsenic.

assay The testing and quantification of the abundance of elements of compounds of interest within a sample.

Au Chemical symbol for gold.

auger drilling A rotary drilling technique which uses a blade drill bit and screw auger shaft to return sample to the surface.

axial plane The geometric plane that intersects the crest or trough of a fold, about which the limbs are more or less symmetrically arranged.

basal Refers to the lowermost stratum in a sedimentary sequence. For

per

sona

l use

onl

y




basalt A dark, fine-grained volcanic rock of low silica (<55%) and high iron and magnesium composition, composed primarily of plagioclase and pyroxene.

basin A large depression within which sediments are sequentially deposited and lithified.

biotite A dark brown to green, magnesium-iron mica commonly found in igneous and metamorphic rocks.

Birimian A subdivision of the Proterozoic Era within sub-Saharan Africa.

breccia Rock comprising angular fragments enclosed in a matrix, usually the result of persistent fracturing by tectonic or hydraulic means.

brittle-ductile deformation A combination of both brittle and plastic deformation produced in response to changes in stress orientation or changes in the rock competency due to progressive alteration.

ca Approximately.

calc-silicate A fine grained metamorphic rock containing a high abundance of calcium and/or magnesium silicate minerals.

Cambrian The oldest period of the Paleozoic era, between approximately 545 million years and 490 million years ago.

carbonate alteration The modification of a rock by the introduction of calcium rich fluids to form calcium carbonate.

Cenozoic (or Canozoic)

An era of geologic time, from the beginning of the Tertiary period to the present. The Cenozoic is considered to have begun about 65 million years ago.

chalcopyrite A copper iron sulphide, CuFeS2.

channel sample Sample taken from the wall of a mine opening, or along a surface exposure, trench or costean, in which a furrow is made and the sample is combined over designated intervals for analysis.

charnockite A quartz-Feldspathic granulite containing hypersthene.

clastic Pertaining to a rock made up of fragments or pebbles (clasts).

colluvium A loose, heterogeneous and incoherent mass of soil material deposited by slope processes.

competency contrast Evident where two juxtaposed rock types which, on deformation, behave in a brittle and ductile fashion respectively.

complex An assemblage of rocks of any age or origin that has been folded or intruded together.

conglomerate A rock composed predominantly of rounded pebbles, cobbles or boulders deposited by the action of water.

continental Rocks deposited on, or environments within, continental areas.

cordierite A silicate of magnesium and aluminium, Mg2Al3 (AlSi5O18), found as an accessory mineral in granite and metamorphic rocks.

cover Unmineralised overburden overlying a mineralised or potentially mineralised lithology.

For

per

sona

l use

onl

y

PROSPECTUS 121



craton Large, and usually ancient, stable mass of the earth’s crust comprised of various crustal blocks amalgamated by tectonic processes. A cratonic nucleus is an older, core region embedded within a larger craton.

cross-section A profile portraying an interpretation of a vertical section of the earth explored by geophysical and/or geological methods.

crystalline Of or pertaining to the nature of a crystal having regular molecular structure.

deformation A general term for the process of folding, faulting, shearing, compression or extension of rocks as a result of stress.

detection limit Lower threshold of detection for a laboratory analytical method.

detrital gold Accumulated particles of gold derived from pre-existing mineralised rocks by the process of weathering or erosion.

diamond drilling Method of obtaining a cylindrical core of rock by drilling with a diamond set or diamond impregnated bit.

dip The angle at which a rock stratum or structure is inclined from the horizontal.

disseminated sulphides Sulphide grains that are finely and evenly distributed throughout a rock mass.

domain A geological area sharing a number of common characteristics eg. metamorphic grade, structure, genesis.

Exploration License Granted temporary title over a large area of land entitling the holder to explore for one or more mineral commodities.

facies The aspect belonging to a geologic unit of sedimentation, including mineral composition, type of bedding, fossil content, etc.

fault A fracture in a rock along which there has been relative movement either vertically or horizontally.

feldspar A group of rock forming minerals.

fine-grained Said of a crystalline rock, and of its texture, in which the individual minerals are relatively small, generally applied where particles have an average diameter less than 1mm.

fire assay The assaying of metallic ores, usually gold and silver, by methods requiring a furnace heat.

fold A planar sequence of rocks or a feature bent about an axis.

fold axes The central part of a fold, about which strata are bent.

fold axis The central part of a fold, about which strata are bent.

foliated Banded rocks, usually due to crystal differentiation as a result of metamorphic processes.

fracturing The natural breakage of rock, generally as a result of forces which have acted on the rock mass.

g/t Au Grams per tonne gold, a standard unit for demonstrating the concentration of gold in a rock.

gabbro A fine to coarse grained, dark coloured, igneous rock composed mainly of calcic plagioclase, clinopyroxene and sometimes olivine.

For

per

sona

l use

onl

y




gallery A horizontal or nearly horizontal underground passage.

geophysical surveys The exploration of an area in which geophysical properties and relationships unique to the area are mapped by one or more geophysical methods.

gneiss A coarse-grained, banded, high grade metamorphic rock.

gondite A quartz-spessartite garnet rock.

grab sample A fist-sized, selective rock sample.

granite A coarse-grained igneous rock containing mainly quartz and feldspar minerals and subordinate micas.

granodiorite A coarse grained igneous rock composed of quartz, feldspar and hornblende and/or biotite.

granulite Metamorphic rocks formed by high temperature and/or pressure metamorphism.

graphite A form of Carbon. Also refers to rocks made up dominantly of graphite.

greenschist facies A classification of the metamorphic grade of a rock, diagnostically defined by the metamorphic formation of chlorite at generally lower pressures and temperatures.

greenstone Term commonly applied to low metamorphic grade rocks of basic composition and comprised largely of the minerals albite, chlorite and amphibole.

ground magnetic survey Surface based measurements of the earth’s magnetic field intensity to locate concentrations of magnetic minerals.

ha Hectare, unit area 100m by 100m.

hornblende A rock forming amphibole group mineral which forms part of the mafic component of igneous rocks.

hydrothermal Pertaining to hot aqueous solutions having temperatures up to 400°C. The solutions transport and deposit metals and chemicals in solution.

induced polarisation (IP) A ground-based geophysical survey technique measuring the intensity of an induced electric current, used to identify disseminated sulphide deposits.

intra-cratonic Fault bounded depression within a large, stable mass of the earth’s crust.

JORC The Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, the Australian Institute of Geoscientists and the Australian Mineral Industry Council.

K-feldspar An abbreviation for potassium feldspar.

kinzigite A coarse-grained metamorphic rock of pelitic composition occurring in the granulite facies. Essential minerals are garnet and biotite, with which occur varying amounts of quartz, K-feldspar, oligoclase, muscovite, cordierite, and sillimanite.

L Litre, a standard metric unit measure of liquid volume.

lateritisation An extreme form of weathering common in tropical climates, in which silica and other constituents are removed, leaving a rock characterised by a high proportion of alumina and/or iron oxide.

leucosome A coarse-grained, quartzofeldspathic vein, varying in thickness from a few centimetres to a metre or two, and found as a high-grade metamorphic product. F

or p

erso

nal u

se o

nly

PROSPECTUS 123



low-grade Pertaining to ores that have a relatively low content of metal compared with other richer material from the same general area.

Ma Million years ago.

mafic Pertaining to, or composed dominantly of, the dark coloured ferromagnesian rock forming silicates.

magnetic anomaly Zones where the magnitude and orientation of the earth’s magnetic field is distorted by magnetic rocks.

Mesoproterozoic Referring to the period of earth’s history between 1600Ma and 1000Ma.

Mesozoic The era of geologic time between approximately 250 and 65 million years, following the Palaeozoic and preceding the Cainozoic era.

metamorphic A rock that has been modified by the effects of pressure, heat and fluids within the crust.

metasedimentary A rock formed by metamorphism of sedimentary rocks.

metasiltstones A siltstone that has been metamorphosed.

metavolcanic Volcanic rock that has been metamorphosed.

migmatite Composite rock composed of metamorphic rocks that have undergone incipient melting.

mineralisation The concentration of metals and their compounds in rocks, and the processes involved therein.

monzogranite A granular plutonic rock containing approximately equal amounts of orthoclase and plagioclase feldspar, but usually with a low quartz content.

monzonite A granular plutonic rock containing approximately equal amounts of orthoclase and plagioclase and thus, intermediate between syenite and diorite.

Moz Million ounces.

muscovite A white to pale green, potassium-aluminium mica commonly found in igneous and metamorphic rocks.

mylonite A hard compact rock with a streaky or banded structure produced by extreme granulation of the original rock mass in a fault or thrust zone.

Neoproterozoic Late Proterozoic era of geological time, between 1,000 million years and 545 million years ago.

nepheline A silicate mineral (Na,K)AlSiO4 of the feldspathoid group.

Ordovician The second Period of the Palaeozoic era, between about 490 and 434 million years ago.

orientation survey A geochemical survey performed using a variety of sampling and analytical methodologies, to determine the most effective method.

orogen A belt of deformed rocks, usually comprising metamorphic and intrusive igneous rocks, commonly occurring along the collision zone between cratons.

orogeny A deformation and/or magmatic event in the earth’s crust, usually caused by collision between tectonic plates.

For

per

sona

l use

onl

y




Paleoproterozoic Early Proterozoic era of geological time, between 2,500 million years and 1,600 million years ago.

Paleozoic An era of geologic time between the Late Precambrian and the Mesozoic era, 545 to 251 million years ago.

panning A technique for manually concentrating and/or recovering heavy minerals from a sample of sediment.

pelite A sediment or sedimentary rock composed of the finest detritus (clay- or mud-size particles); e.g., a mudstone, or calcareous sediment composed of clay and minute particles of quartz.

petrography The science of the description and systematic classification of rocks and minerals with the aid of a microscope.

Phanerozoic Period of the earth’s history from about 570Ma to the present.

phyllite A metasedimentary rock displaying a platy cleavage and low sheen.

plagioclase A feldspar mineral (aluminium silicate) in which calcium and sodium are the dominant cations.

pluton Large body of igneous rock, typically in the order of several kilometres to 10's of kilometres in diameter.

potassium feldspar Potassium-rich feldspar comprised of silica, aluminium, potassium and subordinate sodium.

ppb Parts per billion, a measure of low level concentration.

ppm Parts per million, quantitative equivalent of g/t.

Precambrian Pertaining to all rocks formed before Cambrian time (older than 545 million years).

Proterozoic An era of geological time spanning the period from 2,500 to 545 million years before present.

pyrite An iron sulphide mineral, FeS2.

pyroxene Silicate mineral common in mafic rocks containing varying amounts of Ca, Na, Mg, and Fe.

quartz A mineral composed of silicon dioxide, SiO2.

quartzite A sandstone that has been metamorphosed or indurated by the recrystallisation of silica.

quartzofeldspathic Compositional term relating to rocks containing abundant quartz and feldspar, commonly applied to metamorphic and sedimentary rocks.

Quaternary That period of time between 1.8 million years before present and the present day.

Recent A geological Epoch of the Quaternary Period.

regional mapping Geological mapping on a regional scale.

regolith The layer of fragmental and unconsolidated material which overlies or covers in situ basement rock.

restite The residual material from a cooling magma which cannot be readily incorporated into the crystal lattice of the more usual constituent minerals. F

or p

erso

nal u

se o

nly

PROSPECTUS 125



rift A linear depression or basin caused by the subsidence of a central block of ground between two semi-parallel fault surfaces.

rock-chip sampling The collection of selective or representative samples of rock fragments within a limited area for analysis.

schist A crystalline metamorphic rock having a foliated or parallel structure due to the recrystallisation of the constituent minerals.

screened fire assay An analytical technique incorporating fire assay in which oversize material (generally greater than 200 microns) is separately weighed and the gold content determined in addition to duplicate fire assay of the undersize component of the sample.

sedimentary A term describing a rock formed by the accumulation, of biogenic or chemically formed minerals, and/or transported rock or mineral particles.

sericite A white or pale apple green potassium mica, very common as an alteration product in metamorphic and hydrothermally altered rocks.

shaft A vertical or inclined tunnel from the surface, through which underground excavations can be entered and by which ore and waste may be removed.

shear A zone in which rocks have been deformed primarily by ductile means in a response to applied stresses.

shield Craton or portion of a craton.

sillimanite A silicate of aluminium, Al2OsiO5, common in aluminous sedimentary rocks of high metamorphic grade.

siltstone A rock intermediate in character between a shale and a sandstone. Composed of silt sized grains.

sinistral Lateral movement on a fault, whereby the far side block has moved left, relative to the near side.

soil All unconsolidated materials above bedrock that contain portions of inorganic and organic matter.

spessartite A nesosilicate, manganese aluminium garnet species, Mn2+3Al2(SiO4)3.

stockwork A network of (usually) quartz veinlets of varying orientation, produced during pervasive brittle fracture.

stratiform Occurring parallel to the rock strata, and deposited at the same time.

Bedded or layered.

stream sediment The fine material such as silt found in drainages.

stream sediment sample Bulk or sieved sample of sand or silt collected from an active or ephemeral stream-bed and analysed as representative of the area drained by the stream.

strike Horizontal direction or trend of a geological structure.

strike-slip fault Fault on which the principal direction of movement is sub-horizontal.

structural control The influence of structures on mineral deposition.

suite A series of lithologies or minerals related through origin or composition.

For

per

sona

l use

onl

y




supergene enrichment Solution of metal by oxidised surface waters from the upper part of an ore deposit and its precipitation below, usually in response to reduction, creating a zone of enrichment.

syenite An intrusive igneous rock composed essentially of orthoclase and little or no quartz and ferromagnesian minerals.

syncline A fold in rocks in which the strata dip inward from both sides towards the axis.

t Tonne.

targets Localities with sufficient geoscientific evidence to be worthy of further exploration.

tenement A general term applied to an area of land which is being explored or mined for minerals.

terrane / terrain A fault-bounded body of rock of regional extent, characterised by a geologic history different from that of contiguous terranes. A terrane is generally considered to be a discrete allochthonous fragment of oceanic or continental material added to a craton at an active margin by accretion.

Tertiary Subdivision of the Cainozoic era, covering the period from 65 to 1.8 million years ago.

Tonalite A coarse grained granitic rock composed of quartz, sodium-calcium feldspar and a high proportion of iron rich minerals.

Tourmaline A complex aluminium silicate mineral containing boron.

Trench In geological exploration, a narrow, shallow ditch cut across a mineral deposit to obtain samples or to observe character.

ultramafic An igneous rock in which more than 90% of the minerals are ferromagnesium minerals, with only trace quartz and feldspar, synonymous with ultrabasic.

units Recognisable geological entity of variable rocks within a geological formation.

VALMIN Code Code and Guidelines for the Technical Assessment and/or Valuation of Mineral and Petroleum Assets and Mineral and Petroleum Securities for the use of Independent Expert Reports; maintained by the Australasian Institute of Mining and Metallurgy.

volcanic Pertaining to igneous material poured out on the surface of the earth in a molten state and to fragmental material of all sizes erupted from volcanic vents.

vug A small cavity in a rock, commonly lined with a crystalline mineral incrustation.

weathering The effect on rocks and ore minerals of prolonged exposure to atmospheric elements such as water and oxygen.

workings Areas where prospecting or mining activity has been undertaken.

For

per

sona

l use

onl

y

PROSPECTUS 127

SECTION 7 BRAZILIAN COUNSEL LEGAL OPINIONF

or p

erso

nal u

se o

nly


For

per

sona

l use

onl

y

PROSPECTUS 129

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 131

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 133

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 135

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 137

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 139

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 141

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 143

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 145

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 147

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 149

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 151

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 153

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 155

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 157

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 159

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 161

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 163

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 165

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 167

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 169

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 171

For

per

sona

l use

onl

y


SECTION 8 FINANCIAL INFORMATION AND INVESTIGATING ACCOUNTANT’S REPORTFINANCIAL INFORMATION

IntroductionThe financial information set out in this Section 8 summarises the Company’s selected consolidated financial data which is comprised of the Company’s reviewed consolidated statement of financial position as at 31 July 2012 in addition to a Pro Forma Consolidated Statement of Financial Position as at 31 July 2012.

This Section contains the following financial information, prepared by the Directors:

(a) the Reviewed Historical Consolidated Statement of Financial Position as at 31 July 2012; and

(b) a Pro Forma Consolidated Statement of Financial Position as at 31 July 2012, which assumes completion of the pro forma transactions set out in Section 8 (Note 1) as at that date, including the Offer under this Prospectus.

The Directors of the Company are responsible for the inclusion of all financial information in the Prospectus. The Historical and Pro Forma Consolidated Statements of Financial Position have been reviewed by Grant Thornton Corporate Finance Pty Ltd whose Investigating Accountant’s Report is contained in Section 8.

The information set out in this Section 8 and the Company’s selected consolidated financial information should be read together with:

(a) management’s discussion & analysis;

(b) the risk factors described in Section 9;

(c) the Investigating Accountant’s Report on the Historical and Pro Forma Financial Information set out in Section 8; and

(d) the other information contained in this Prospectus.

Potential investors should be aware that past performance is not an indication of future performance.

MANAGEMENT’S DISCUSSION & ANALYSIS OF THE HISTORICAL FINANCIAL INFORMATION

OverviewParinga is a mineral exploration company that was incorporated on 27 February 2012 and is an Australian domiciled, Brazilian focussed gold and graphite exploration company which has been granted various exploration permits within Brazil.

In the five months ended 31 July 2012, the Company has applied for or has purchased the exploration rights for each of the projects (set out in Section 5.3) through its wholly owned subsidiary, Paringa Brazil. Other than these transactions, the Company has had limited operating history. The Directors therefore consider that including historical profits, losses and cash flow information of Paringa is not appropriate. Accordingly, the Directors have only included financial information which they consider is relevant to potential investors being the reviewed Historical and Pro Forma Consolidated Statement of Financial Position of Paringa at 31 July 2012.

Reviewed Historical Consolidated Statement of Financial PositionThe Company’s Historical Consolidated Statement of Financial Position as at 31 July 2012 was reviewed by Grant Thornton Audit Pty Ltd and an unqualified opinion provided.

For

per

sona

l use

onl

y

PROSPECTUS 173

Pro Forma Consolidated Statement of Financial Position as at 31 July 2012The following Pro Forma Consolidated Statement of Financial Position has been prepared to illustrate the effects of the pro forma adjustments including the Offer which are set out below and in Section 8 (Note 1) as if they had occurred on or before 31 July 2012.

Notes

As at 31 July 2012

Reviewed$’000 1

Adjustments$’000

Reviewed Pro forma

$’000 2

CURRENT ASSETS

Cash and cash equivalents 2 – 10,158 10,158

TOTAL CURRENT ASSETS – 10,158 10,158

NON CURRENT ASSETS

TOTAL NON CURRENT ASSETS – – –

TOTAL ASSETS – 10,158 10,158

CURRENT LIABILITIES

Trade and other payables 78 – 78

Loan payable 3 293 (293) –

TOTAL CURRENT LIABILITIES 371 (293) 78

TOTAL LIABILITIES 371 (293) 78

NET ASSETS (371) 10,451 10,080

EQUITY

Issued capital 4 – 10,588 10,588

Accumulated losses 5 (371) (137) (508)

TOTAL EQUITY (371) 10,451 10,080

1 The Historical Consolidated Statement of Financial Position has been extracted from the reviewed statement of financial position as at 31 July 2012.

2 The Pro Forma Consolidated Statement of Financial Positions as at 31 July 2012 reflect the Pro Forma Adjustments, the application of the funds from the Offer less the costs associated with the Offer.

The Historical and Pro Forma Consolidated Statement of Financial Position should be read in conjunction with the following notes.

NOTES TO THE PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note 1 – Pro Forma AdjustmentsThe following transactions and events contemplated in this Prospectus, referred to as the Pro forma Adjustments, which are to take place on or before the completion of the Offer are presented as if they together with the Offer had occurred on or before 31 July 2012:

Subsequent events:

Subsequent to the balance date, the issue of 7,750,000 Shares were issued to Directors and the Exploration Manager amounting to $58,000 (note 1 and note 4).

Subsequent to the balance date, the balance of the loan facility pursuant to the Silver Lake Loan Agreement was provided up to the facility limit (note 3).

For

per

sona

l use

onl

y


Pro forma Adjustments:The Offer

> The issue of 33,333,333 Shares at $0.30 each amounting to approximately $10 million.

The Offer costs

> Expenses associated with the Offer (including advisory, legal, accounting and administrative fees as well as printing, advertising and other expenses), estimated to be $0.8 million (exclusive of GST). An amount of $0.7 million has been charged against issued capital and $0.1 million against accumulated losses.

Loan facility repayment

> The loan facility from Silver Lake amounting to $1.2 million is converted into equity Shares at $0.06 per share, totalling 20 million Shares in accordance with the Silver Lake Loan Agreement (summarised in Section 11.4).

Recognition of a deferred tax assetA deferred tax asset has not been recognised in relation to the capitalised Offer costs due to the uncertainty surrounding the flow of economic benefits that will flow in future periods.

Note 2 – Cash and Cash EquivalentsThe pro forma cash and cash equivalents are set out below:

$’000

Cash and cash equivalents at 31 July 2012 –

Subsequent events:

Proceeds from shares issued to Directors 58

Balance of loan facility from Silver Lake 907

Cash and cash equivalents after subsequent events 965

Pro forma transactions:

Proceeds from Shares issued under the Offer 10,000

Expenses associated with the Offer (807)

Pro forma cash and cash equivalents 10,158

Note 3 – Loan PayableThe pro forma loan payable is set out below:

$’000

Loan payable at 31 July 2012 293

Subsequent event:

Loan advanced from Silver Lake up to the facility limit 907

Total Loan Facility Limit1 1,200

Pro forma transaction:

For value of the Shares issued to Silver Lake in consideration for repayment of the loan facility (1,200)

Pro forma loan payable –

Notes

1. The Company has entered into the Silver Lake Loan Agreement with Silver Lake. A summary of the Silver Lake Loan Agreement is set out in Section 11.4

For

per

sona

l use

onl

y

PROSPECTUS 175

Note 4 – Issued CapitalThe pro forma issued capital is set out below:

$’000

Issued capital at 31 July 2012 –

Subsequent event:

Proceeds from Shares issued to Directors 58

Issue capital after subsequent event 58

Pro forma transactions:

Fair value of Shares issued to Silver Lake in consideration for repayment of the loan facility 1,200

Capital raising costs paid under the Offer (670)

Proceeds from Shares issued under the Offer 10,000

Pro forma issued capital 10,588

No. of shares

Number of Shares issued at 31 July 2012 1

Subsequent event:

Shares issued to Directors and the Exploration Manager 7,750,000


Shares issued under the Offer 33,333,333

Shares issued to Silver Lake 20,000,000 1

Pro forma Shares issued 61,083,334

Notes

1. These Shares will be issued to Silver Lake on the Conditional Approval Date in accordance with Silver Lake Loan Agreement as summarised in Section 11.4.

Note 5 – Accumulated LossesThe pro forma accumulated losses position has been calculated as follows:

$’000

Accumulated losses at 31 July 2012 (371)


Costs of the Offer Expensed (137)

Pro Forma accumulated losses (508)

For

per

sona

l use

onl

y


Note 6

No. of options

Number of Unlisted Options issued at 31 July 2012 –


Options issued to Directors and the Exploration Manager 2,550,000

Pro forma options issued 2,550,000

2,250,000 Unlisted Options were issued on 31 August 2012 and 300,000 on 7 September 2012 for nil consideration as pre-seed options given to Directors and Senior Management. The Unlisted Options may be exercised by the holder at any time on or after the Company being admitted to the official list of the ASX for an exercise price of A$0.30 per Share, the options will expire 5 years from the date of issue.

Note 7 – Summary of Significant Accounting PoliciesBasis of PreparationThe Pro forma Consolidated Statement of Financial Position presented in this Financial Information represents the ongoing business of the Company.

The financial information set out in the Prospectus has been prepared in accordance with the recognition and measurement principles (but not all the disclosure requirements) prescribed by Australian Accounting Standards and other pronouncements of the Australian Accounting Standards Board.

Going Concern BasisThe historical financial information included in this Prospectus was prepared on a going concern basis that contemplates the realisation of assets and discharge of liabilities in their normal course of operation.

Since inception, Paringa has incurred net losses and negative cash flows from operations. At 31 July 2012, the Company had an accumulated deficit of approximately $0.4 million. Management expects operating losses and negative cash flows will continue for the foreseeable future and anticipates that expenses may increase significantly from current levels because of additional costs and expenses related to exploration activities.

The business of mining and exploration involves a high degree of risk and there can be no assurance that the anticipated exploration programs will ultimately result in profitable mining operations. The recoverability of resource property acquisition cost and exploration expenditure is dependent upon several factors. These include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of mineral properties.

These circumstances raise substantial doubt about the Company’s ability to continue as a going concern if the capital raising contemplated in this Prospectus is not successful. In the case that capital is not raised as contemplated in this Prospectus, the Company will need to adjust its expenses from operations and seek other sources of funding.

The historical and pro forma financial information included in this Prospectus does not include any adjustments to reflect the possible future effects of the recoverability and classification of assets and liabilities that may result from the possible inability to continue as a going concern if the capital raising the subject of this Prospectus is not successful. If the going concern assumption is not appropriate, then adjustments would be necessary to the carrying value of assets and liabilities, the reported expenses and the statement of financial position classifications used and such adjustments could be material.

Significant Accounting PoliciesImpairment of non-financial assetsAt each reporting date, the Company reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

Any excess of the asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

Impairment testing is performed annually for intangible assets with indefinite lives and intangible assets not yet available for use. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs.

For

per

sona

l use

onl

y

PROSPECTUS 177

Cash and cash equivalentsCash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Exploration, evaluation and development expenditurePre licence costs are recognised in the income statement as incurred. Exploration, evaluation and development expenditure, including the costs of acquiring licences, are capitalised on a project by project basis. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves.

Expenditure deemed to be unsuccessful is recognised in the statement of comprehensive income immediately.

Exploration, evaluation and development assets are assessed for impairment if facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Goods and Services TaxRevenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the statement of financial position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the Statement of Financial Position.

Principles of consolidationThe consolidated financial information incorporates the assets, liabilities and results of entities controlled by Paringa at 31 July 2012. A controlled entity is any entity over which Paringa has the power to govern the financial and operating policies so as to obtain benefits from its activities.

Where controlled entities have entered or left the group during the year, the financial performance of those entities is included only for the period of the year that they were controlled.

In preparing the consolidated financial information, all intergroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.

Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

For

per

sona

l use

onl

y


INVESTIGATING ACCOUNTANT’S REPORTF

or p

erso

nal u

se o

nly

PROSPECTUS 179

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 181

For

per

sona

l use

onl

y


For

per

sona

l use

onl

y

PROSPECTUS 183

For

per

sona

l use

onl

y


SECTION 9 RISK FACTORS

Investors should be aware an investment in the Company involves risks which may be higher than risks associated with an investment in some other companies. Careful consideration should be given to all matters raised in this Prospectus and the relative risk factors prior to applying for Shares offered for subscription under this Prospectus. Some of these risks can be mitigated by the use of appropriate safeguards and actions, but some are outside the control of the Company and cannot be mitigated. Prospective investors in the Company should consider the risk factors described in this Section, together with the information contained elsewhere in this Prospectus, before deciding whether to apply for Shares.

9.1 TITLE RISK

There are a number of conditions that the Company must satisfy with respect to the Projects to keep the Projects in good standing. These include but are not limited to license fee payments, annual reporting requirements (mining, safety and environmental), annual plan filing requirements (mining and environmental), the establishment and maintenance of an environmental reclamation fund, and various other permits, approvals, and consents including the procurement of appropriate land and water use agreements. The Company’s exploration licenses are issued for an initial three-year term, which is renewable once before a Mining License must be obtained. There can be no assurance that the Company will be able to renew its exploration licenses or convert such licenses into forms appropriate for ongoing operations, or if such licenses or permits are granted, that the Company will be in a position to comply with all conditions imposed.

The Company has also made, or has acquired an interest in, a number of applications for exploration licenses. There is no guarantee that those applications will be successful. Please refer to Section 7 for further details on the applications and a summary of Brazilian mining law to which those applications are subject.

In addition to any regulatory requirements the Company must meet to maintain its tenements, Paringa Brazil (a wholly owned subsidiary of the Company) has entered into a number of agreements whereby it has acquired a 100% legal interest in certain tenements. Paringa Brazil has contractually agreed with the vendors of such tenements to undertake certain obligations during specified periods. If Paringa Brazil does not comply with those contractual obligations, there is a risk it will be required to transfer the tenements back to the vendors in accordance with the agreements pursuant to which those tenements were acquired. A summary of the agreements is set out in Section 7 of this Prospectus.

9.2 EXPLORATION SUCCESS

Despite the best efforts of the Company, there can be no assurance exploration on the Projects, or any other tenements which may be acquired by the Company in the future, will result in the discovery of a deposit that is an economically viable deposit on the Projects or on any other tenements which may be acquired. Even if an apparently viable mineral deposit is identified, there is no guarantee it can be profitably exploited.

9.3 EXPLOITATION SUCCESS

The Projects are at an early stage of exploration and potential investors should understand that mineral exploitation is a high risk undertaking. There can be no assurance that exploitation of the Projects described in this Prospectus, or any other tenements which may be acquired in the future, will result in economic gains for the Company or be or remain economically viable.

9.4 OPERATING RISKS

The current and future operations of the Company, including exploration, appraisal and possible production activities may be affected by a range of operational factors.

The Projects will be subject to extreme climatic conditions which restrict the period of exploration, appraisal and possible production activities which may take place and may also place Company personnel at risk if exposed to these extreme conditions.

A summary of factors which may affect the operations of the Company include:

9.4.1 geological conditions;

9.4.2 unanticipated operational and technical difficulties encountered in geophysical surveys, drilling and production activities;

9.4.3 mechanical failure of operating plant and equipment, industrial and environmental accidents, acts of terrorism or political or civil unrest and other force majeure events;

9.4.4 unavailability of aircraft or drilling equipment to undertake airborne electromagnetic and other geological and geophysical investigations;

9.4.5 unexpected shortages or increases in the cost of consumables, spare parts, plant and equipment;

9.4.6 prevention or restriction of access by reason of inability to obtain consents or approvals;

9.4.7 current exploration operations and future mine development on the Projects are subject to the Company’s ability to obtain a wide range of permits, licenses and approvals and there is no guarantee such permits, licenses and approvals will be granted or will be granted in a timely manner;

9.4.8 advancement of the exploration operations (if successful) to mine development and full commercial production can be a lengthy process taking a number of years where the Projects may be subject to new laws, regulations, and taxes which may have a material impact on the Company; and

9.4.9 restriction of access to infrastructure due to decisions by Brazilian authorities.

9.5 DEVELOPMENT RISKS

The operations of the Company may be affected by various other factors, including the failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, difficulties in commissioning and operating plant and equipment, mechanical failure or plant

For

per

sona

l use

onl

y

PROSPECTUS 185

breakdown, unanticipated problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes, and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment.

9.6 ENVIRONMENTAL RISKS

The Projects are subject to Brazilian laws and regulations concerning the environment. As with most exploration projects and mining operations, the Company’s activities are expected to have an impact on the environment, particularly if advanced exploration or mine development proceeds.

The Company intends to conduct its activities in an environmentally responsible manner and in accordance with applicable laws and industry standards. Areas disturbed by the Company’s activities will be rehabilitated as required by applicable laws and regulations.

9.7 FINANCING REQUIREMENTS

The Company is likely to need to undertake a further capital raising in the future to continue the necessary development work on the Projects. The Company intends to complete a definitive feasibility study to support that further fund raising.

The Directors can give no assurances as to the level of future borrowings or further capital raisings that will be required to meet their longer term aims for the Company to complete the development of the Projects and to the extent such borrowings or capital raisings are required, whether they can be obtained on terms favourable to the Company.

Any additional equity financing may be dilutive to Shareholders and any debt financing, if available, may involve restrictive covenants, which may limit the Company’s operations and business strategy.

Unless, and until, the Company develops or acquires income producing assets, it will be dependent upon the funds raised by the Offer (and interest earned on those funds) and its ability to obtain future equity or debt funding to support exploration, evaluation and development of the properties in which it has an interest. In addition, the Company’s Share price and its ability to raise future funds are likely to be significantly impacted by commodity prices and market conditions.

The Company’s ability to raise further equity, or debt, or to divest part of its interest in a project to raise funds or otherwise, and the terms of such transactions will vary according to a number of factors, including the success of exploration and the future development of the project, stock market conditions and prices for gold and graphite.

9.8 UNFORESEEN EXPENDITURE RISK

Expenditure may need to be incurred which has not been taken into account in the preparation of this Prospectus. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company.

9.9 LEGAL RISKS ASSOCIATED WITH OPERATING IN BRAZIL

The Company’s Brazilian operations are subject to the jurisdiction of Brazil’s courts and this may result in risks such as:

9.9.1 a higher degree of discretion on the part of governmental agencies;

9.9.2 the lack of political or administrative guidance on implementing applicable rules or regulations including, in particular, local taxation and property rights; and

9.9.3 inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions.

The commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to licenses and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that the licenses and other legal arrangements will not be adversely affected by the actions of government authorities or others and the effectiveness of an enforcement of such arrangements cannot be assured. In the case where the Company disputes the actions of the State with regards to the Projects, it is unlikely the Company would be successful in raising a claim in Australian courts for the reasons of comity or the doctrine of sovereign immunity.

9.10 SOVEREIGN RISK

Adverse changes in the government policies or legislation in Brazil (and other regulatory bodies) affecting taxation, profit reparation, royalties, exploration and mining activities may affect the future operations of the Company. Should there be a material change in the political, legal and social environments in Brazil, the Director’s may reamend investments, decisions and commitments to its Brazilian assets.

9.11 FLUCTUATION IN EXCHANGE RATES

Any revenue generated by the Company is expected to be in US$ or Brazilian Real (R$) while its cost base would be expected to be in A$, R$ and US$.

Consequently the cross exchange rates for these currencies will have an impact on any of the Company’s earnings (if achieved) in A$. The cross exchange rates are affected by numerous factors beyond the control of the Company. These factors include Australia’s, Brazil’s and the USA’s economic conditions and outlook for interest rates, inflation and other economic factors. These factors may have a positive or negative effect on the Company’s exploration, project development and production plans and activities, together with the ability to fund those plans and activities.

For

per

sona

l use

onl

y


9.12 RELIANCE ON KEY PERSONNEL AND EMPLOYEES

The responsibility of overseeing the day-to-day operations and the strategic management of the Company depends substantially on its senior management and its key personnel. There can be no assurance given that there will be no detrimental impact on the Company if one or more of these employees cease their employment.

9.13 ECONOMIC FACTORS

Factors such as inflation, currency fluctuation, interest rates, supply and demand and industrial disruption have an impact on operating costs, commodity prices and stock market processes. The Company’s future possible revenues and Share price can be affected by these factors which are beyond the control of the Company and its Directors.

9.14 COMMODITY PRICE VOLATILITY

If the Company achieves exploration and development success which leads to mineral production, the marketing of the gold and graphite product depends on the quality and tonnage demand from the market place. The revenue it will derive through the sale of commodities exposes the potential income of the Company to commodity price risks.

Commodity prices fluctuate and are affected by many factors beyond the control of the Company. Such factors include supply and demand fluctuations for gold and graphite, technological advancements, forward selling activities and other macro-economic factors.

9.15 COMPETITION

The Company will be competing with other companies in the resource sector; many of which will have access to greater resources than the Company and may be in a better position to compete for future business opportunities. There can be no assurance that the Company can compete effectively with these companies.

9.16 STOCK MARKET CONDITIONS

Stock market conditions may affect the value of the Company’s Shares regardless of the Company’s operating performance. Stock market conditions are affected by many factors such as:

9.16.1 general economic outlook;

9.16.2 movements in, or outlook on, interest rates and inflation rates;

9.16.3 currency fluctuations;

9.16.4 commodity prices;

9.16.5 changes in investor sentiment towards particular market sectors; and

9.16.6 demand for, and supply of, capital.

Investors should recognise that once the Shares are listed on the Official List, the price of the Shares may fall as well as rise. Many factors outside the operations of the Company will affect the price of the Shares, including local and international stock markets, movements in interest rates, economic conditions and investor sentiment generally. In addition, recent world events have affected the price of shares in various sectors. Such events are unpredictable and their impact on the individual companies or markets is beyond the control of the Company.

9.17 SPECULATIVE NATURE OF INVESTMENT

The above list of risk factors ought not to be taken as an exhaustive list of the risks faced by the Company or by investors in the Company. Factors such as inflation, interest rates, levels of tax, taxation law and accounting practices, government legislation or intervention, natural disasters, social upheaval, and war may have an impact on prices, operating costs and market conditions generally. Accordingly, the Company’s future possible revenue and operations can be affected by these factors, which are beyond the control of the Company. General movements in local and international stock markets, and economic conditions could also affect the market price of Shares. Accordingly, the above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Shares offered under this Prospectus.

Therefore, the Shares to be issued pursuant to this Prospectus carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those Shares.

Potential investors should consider that the investment in the Company is speculative and should consult their professional advisers before deciding whether to apply for Shares.

For

per

sona

l use

onl

y

PROSPECTUS 187

SECTION 10 CORPORATE GOVERNANCE

The Company has adopted systems of control and accountability as the basis for the administration of corporate governance. Commensurate with the spirit of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (2nd edition) (“Principles & Recommendations”), the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices.

A summary of the Company’s corporate governance practices is set out below.

10.1 SUMMARY OF BOARD CHARTER

The role of the Board is to provide leadership for and supervision of the Company’s senior management. The Board provides the strategic direction of the Company and regularly measures the progression by senior management of that strategic direction. The Board is responsible for promoting the success of the Company through its oversight role. The Board also reviews the Company’s policies on risk oversight and management, internal compliance and control, its Code of Conduct, and legal compliance. There are mechanisms in place so that the Board can satisfy itself that senior management has developed and implemented a sound system of risk management and internal controls in relation to financial reporting risk and material business risks. The Board monitors and reviews senior management’s performance and implementation of strategy.

The Board delegates to the Managing Director the responsibility of the day-to-day activities in fulfilling the Board’s responsibility. Senior executives are responsible for supporting and assisting the Managing Director in the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board.

10.2 SUMMARY OF AUDIT COMMITTEE CHARTER

The Board has not established an Audit Committee at this time. Until such time as the Board determines that it is appropriate to establish an Audit Committee, the function of the Audit Committee as set out the Audit Committee Charter (as summarised below) will be performed by the Board.

The role of the Audit Committee is to monitor and review the integrity of the financial reporting of the Company and to review significant financial reporting judgments. The Audit Committee is also to review the Company’s internal financial control system and risk management systems and to monitor, review and oversee the external audit function.

The Audit Committee has the power to conduct or authorise investigations into any matters within the Audit Committee’s scope of responsibilities. The Audit Committee has the authority, to seek independent external advice on matters brought before the Committee or in relation to the functions and responsibilities of the Committee. The Audit Committee also assesses whether external reporting is consistent with Audit Committee members’ information and knowledge and is adequate for Shareholder needs and assesses the management processes supporting external financial reporting.

10.3 SUMMARY OF NOMINATION COMMITTEE CHARTER

The Board has not established a Nomination Committee at this time. Until such time as the Board determines that it is appropriate to establish a Nomination Committee, the function of the Nomination Committee as set out the Nomination Committee Charter (as summarised below) will be performed by the Board.

The role of the Nomination Committee is to effectively examine the selection and appointment practices of the Company. The Nomination Committee regularly reviews the size and composition of the Board and makes recommendations to the Board on any appropriate changes. The Nomination Committee identifies and assesses necessary and desirable Director competencies with a view to enhancing the Board.

The Nomination Committee also regularly reviews the time required to be committed by a non-executive director to properly fulfil their duty to the Company and advise the Board. Additional Director appointments may be made by the Board. Any new Director (other than the Managing Director so appointed) will be required to stand for election at the Company’s next annual general meeting following their appointment.

10.4 SUMMARY OF REMUNERATION COMMITTEE CHARTER

The Board has not established Remuneration Committee at this time. Until such time as the Board determines that it is appropriate to establish a Remuneration Committee, the function of the Remuneration Committee as set out the Remuneration Committee Charter (as summarised below) will be performed by the Board.

The function of the Remuneration Committee is to review and make appropriate recommendations on remuneration packages of executive Directors, non-executive Directors and senior executives. The Remuneration Committee is also responsible for reviewing any employee incentive and equity-based plans, including the appropriateness of performance hurdles and total payments proposed.

10.5 REMUNERATION POLICY

Remuneration of Directors and senior executives are set by reference to payments made by other companies of similar size and industry, and by reference to the skills and experience of the Directors and executives.

Shareholders approve the maximum aggregate remuneration for non-executive directors. The Remuneration Committee recommends the actual payments to directors and the Board is responsible for ratifying any recommendations, if appropriate. This Policy is subject to annual review. All of the Directors’ Option holdings are fully disclosed in this Prospectus.

Executive pay and reward consists of a base salary and performance incentives. Long term performance incentives may include Options granted at the discretion of the Board and subject to obtaining the relevant Shareholder approvals.

For

per

sona

l use

onl

y


Directors and senior executives are prohibited from entering into transactions or arrangements which limit the economic risk of participating in unvested entitlements.

10.6 SUMMARY OF CODE OF CONDUCT

This Code of Conduct aims to encourage the appropriate standards of conduct and behaviour of the directors, officers, employees and contractors (collectively called the Employees) of the Company. The Code prohibits Directors from involving themselves in situations where there is a conflict of interest between them as individuals and the interest of the Company. Employees are required to respect the confidentiality of all information of a confidential nature acquired in the course of the Company’s business. The Company acknowledges its responsibility to shareholders, the community and the individual. The Company will use its best endeavours to ensure a safe work place and maintain proper occupational health and safety practices.

10.7 SUMMARY OF POLICY AND PROCEDURE FOR SELECTION AND APPOINTMENT OF DIRECTORS

In considering new candidates, the Board evaluates the range of skills and experience of the existing Board. In particular, candidates will be assessed on the basis of their competencies and qualifications; independence; other directorships; time availability; contribution to the overall balance of the composition of the Board; and depth of understanding of the role of and legal obligations of a director. Any appointment made by the Board is subject to ratification by Shareholders at the next annual general meeting.

10.8 SUMMARY OF PROCESS FOR PERFORMANCE EVALUATION

As part of the annual review of the performance of the Board, the appropriate size, composition and terms and conditions of appointment to and retirement from the Board are considered. The level of remuneration for non-executive directors is considered with regard to practices of other public companies and the aggregate amount of fees approved by Shareholders. The Board also reviews the appropriate criteria for Board membership collectively.

The Board has established formal processes to review its own performance and the performance of individual directors and the committees of the Board, annually.

The Managing Director’s performance evaluation is reviewed by the Board. The Board conducts a performance evaluation of the Managing Director annually by way of informal round-table discussions based on specific criteria including the financial performance of the Company and its subsidiaries, whether strategic objectives are being achieved and the development of management and personnel.

The Managing Director annually reviews the performance of the senior executives. The Managing Director conducts a performance evaluation of the senior executives by interview with each senior executive.

10.9 SUMMARY OF POLICY FOR TRADING IN COMPANY SECURITIES

The Board has adopted a policy which prohibits dealing in the Company’s securities by Directors, officers and employees when those persons possess inside information. The policy also contains a closed period within which Directors, officers, senior executives and prescribed employees are prohibited from trading. Selling the Company’s securities may be permitted in a closed period in certain exceptional circumstances subject to obtaining prior written clearance. Directors are required to obtain clearance prior to trading at all times.

10.10 SUMMARY OF DIVERSITY POLICY

The Board has adopted a Diversity Policy which describes the Company’s commitment to ensuring a diverse mix of skills and talent exists amongst its Directors, officers and employees. The Diversity Policy addresses equal opportunities in the hiring, training and career advancement of Directors, officers and employees. The Diversity Policy outlines the process by which the Board will set measurable objectives to achieve the aims of its Diversity Policy. The Board is responsible for monitoring Company performance in meeting the Diversity Policy requirements, including the achievement of any diversity objectives.

10.11 SUMMARY OF CONTINUOUS DISCLOSURE POLICY

The Board has adopted Continuous Disclosure Policy to assist it to comply with the ASX Listing Rules disclosure requirements. Under the Continuous Disclosure Policy, two responsible Disclosure Officers are appointed who are primarily responsible for ensuring the Company complies with its disclosure obligations. At the date of this Prospectus, this is the Managing Director and the Company Secretary. The duties of the responsible Disclosure Officers are set out in the Continuous Disclosure Policy. The Continuous Disclosure Procedures provide guidelines as to the type of information that needs to be disclosed.

10.12 SUMMARY OF PROCEDURE FOR THE SELECTION, APPOINTMENT AND ROTATION OF EXTERNAL AUDITOR

The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises. The Audit Committee will identify the attributes required of an auditor and will ensure the selection process is sufficiently robust so as to ensure selection of an appropriate auditor. The Board will review the performance of the external auditor on an ongoing basis.

The Audit Committee will discuss with the auditor the provisions the audit firm has in place for rotation of the lead engagement partner and the independent review partner. The Audit Committee shall require that the lead engagement partner be rotated at least every 5 years and the review partner be rotated at least every 3 years.

For

per

sona

l use

onl

y

PROSPECTUS 189

10.13 SUMMARY OF SHAREHOLDER COMMUNICATION STRATEGY

The Board aims to ensure that the Shareholders are informed of all major developments affecting the Company. The Company provides Shareholder materials directly to shareholders through electronic means. A Shareholder may request a hard copy of the Company’s annual report to be posted to them. The Company maintains a website on which the Company makes certain information available on a regular basis.

10.14 SUMMARY OF RISK MANAGEMENT POLICY

The Board has adopted a Risk Management Policy.

The Board oversees an ongoing assessment of the effectiveness of risk management and internal compliance and control.

The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated to management. Management is required by the Board to report back on the efficiency and effectiveness of risk management, inter alia, by benchmarking the Company’s performance against industry standards.

The risk profile of the Company contains both financial and non-financial factors including but not limited to political, social, economic and environmental risks.

To mitigate/manage these risks, the Company has in place a broad range of risk management policies and procedures including competent management in all disciplines, an experienced Board, regular Board meetings, six monthly financial audits, rigorous appraisal of new investments and advisers familiar with the Company.

Management is responsible for the ongoing management of risk with standing instructions to appraise the Board of changing circumstances within the Company and within the international business environment.

10.15 CORPORATE GOVERNANCE STATEMENT

The Company reports below on how it follows (or otherwise departs from) each of the Principles & Recommendations. Where the Company’s corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not, why not” reporting regime, where, after due consideration, the Company’s corporate governance practices depart from a recommendation, the Board has offered full disclosure and an explanation for the adoption of its own practice.

10.16 BOARD

Roles and responsibilities of the Board and Senior Executives(Recommendations: 1.1, 1.3)The Company has established the functions reserved to the Board, and those delegated to senior executives and has set out these functions in its Board Charter, summarised above in the section titled “Summary of Board Charter”.

The Company’s Board Charter will be made available on the Company’s website.

Skills, experience, expertise and period of office of each Director(Recommendation: 2.6)A profile of each Director setting out their skills, experience, expertise and period of office is set out in Section 3 of this Prospectus and on the Company’s website.

Director independence(Recommendations: 2.1, 2.2, 2.3, 2.6)The Board has accepted the following definition of an Independent Director.

An Independent Director is a Non-Executive Director (i.e. is not a member of management) and:

(i) holds less than 5% of the voting shares of the Company and is not an officer of, or otherwise associated directly or indirectly with, a shareholder of more than 5% of the voting shares of the Company;

(ii) within the last three years has not been employed in an executive capacity by the Company or another group member, or been a Director after ceasing to hold any such employment;

(iii) within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the service provided;

(iv) is not a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;

(v) has no material contractual relationship with the Company or another group member other than as a Director of the Company;

(vi) has not served on the board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company; and

(vii) is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

The Board currently does not have any independent directors based on the above definition.

Independent professional advice(Recommendation: 2.6)To assist Directors with independent judgement, it is the Board’s policy that if a Director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a Director then, provided the Director first obtains approval from the Chairman for incurring such expense, the Company will pay the reasonable expenses associated with obtaining such advice.

For

per

sona

l use

onl

y


Selection and appointment of Directors(Recommendation: 2.6)In determining candidates for the Board, the Board will follow a prescribed procedure summarised in the section titled “Summary of Policy and Procedure for Selection and Appointment of Directors” above. This policy will be made available on the Company’s website. The Board recognises the impact of Board tenure on succession planning, that Board renewal is critical to performance and the impact of Board tenure on succession planning. Each Director, other than the Managing Director, must not hold office (without re-election) past the third annual general meeting of the Company following the Director’s appointment or three years follow that Director’s last election or appointment (whichever is the longer). However, a Director appointed to fill a casual vacancy or as an addition to the Board must not hold office (without re-election) past the next annual general meeting of the Company. At each annual general meeting a minimum of one Director or one third of the total number of Directors must resign. A Director who retires at an annual general meeting is eligible for re-election at that meeting. Re-appointment of Directors is not automatic.

Board committeesNomination Committee(Recommendations: 2.4, 2.6)The Board has not established a separate Nomination Committee. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Nomination Committee. Accordingly, the Board will perform the role of the Nomination Committee. Items that are usually required to be discussed by a Nomination Committee will be marked as separate agenda items at Board meetings when required. When the Board convenes as the Nomination Committee it will carry out those functions which are delegated in the Company’s Nomination Committee Charter. The Board will deal with any conflicts of interest that may occur when convening in the capacity of Nomination Committee by ensuring the Director with conflicting interests is not party to the relevant discussions.

To assist the Board to fulfil its function as the Nomination Committee, it has adopted a Nomination Committee Charter, which is summarised above in the section titled “Summary of Nomination Committee Charter”. The Company’s Nomination Committee Charter will be made available on the Company’s website.

Audit Committee(Recommendations: 4.1, 4.2, 4.3, 4.4)The Board has not established a separate Audit Committee and therefore it is not structured in accordance with Recommendation 4.2. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Audit Committee. Accordingly, the Board will perform the role of the Audit Committee. Items that are usually required to be discussed by an Audit Committee will be marked as separate agenda items at Board meetings when required. When the Board convenes as the Audit Committee it will carry out those functions which are delegated in the Company’s Audit Committee Charter. The Board will

deal with any conflicts of interest that may occur when convening in the capacity of Audit Committee by ensuring the Director with conflicting interests is not party to the relevant discussions.

To assist the Board to fulfil its function as the Audit Committee, it has adopted an Audit Committee Charter, which is summarised above in the section titled “Summary of Audit Committee Charter”. The Company’s Audit Committee Charter will be made available on the Company’s website.

The Company has also established procedures for the selection, appointment and rotation of its external auditor. The Company’s Procedure for Selection, Appointment and Rotation of External Auditor is summarised above in the sections titled ““Summary of Procedure for the Selection, Appointment and Rotation of External Auditor” and will be made available on the Company’s website.

Remuneration Committee(Recommendations: 8.1, 8.2, 8.3, 8.4)The Board has not established a separate Remuneration Committee and therefore it is not structured in accordance with Recommendation 8.2. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Remuneration Committee. Accordingly, the Board will perform the role of the Remuneration Committee. Items that are usually required to be discussed by a Remuneration Committee will be marked as separate agenda items at Board meetings when required. When the Board convenes as the Remuneration Committee it will carry out those functions which are delegated in the Company’s Remuneration Committee Charter. The Board deals with any conflicts of interest that may occur when convening in the capacity of Remuneration Committee by ensuring the Director with conflicting interests is not party to the relevant discussions.

To assist the Board to fulfil its function as the Remuneration Committee, it has adopted a Remuneration Committee Charter, which is summarised above in the section titled “Summary of Remuneration Committee Charter”. The Company’s Remuneration Committee Charter will be made available on the Company’s website.

There are no termination or retirement benefits for non-executive Directors (other than for superannuation). The Company’s Remuneration Committee Charter includes a statement of the Company’s policy on prohibiting transactions in associated products which limit the risk of participating in unvested entitlements under any equity based remuneration schemes.

Performance evaluationSenior executives(Recommendation: 1.2)The Company has established a process for evaluating the performance of senior executives, which is summarised above in the section titled “Summary of Process for Performance Evaluation”.

The Company’s Process for Performance Evaluation will be made available on the Company’s website.

For

per

sona

l use

onl

y

PROSPECTUS 191

Board, its committees and individual directors(Recommendations: 2.5, 2.6)The Company has established a process for evaluating the performance of the Board, its committees and individual Directors, which is summarised above in the section titled “Summary of Process for Performance Evaluation”.

The Company’s Process for Performance Evaluation will be made available on the Company’s website.

Ethical and responsible decision makingCode of Conduct(Recommendations: 3.1, 3.3, 3.5)The Company has established a Code of Conduct as to the practices necessary to maintain confidence in the Company’s integrity, the practices necessary to take into account its legal obligations and the reasonable expectations of its stakeholders, and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices. The Company’s Code of Conduct is summarised above in the section titled “Summary of Code of Conduct” and will be made available on the Company website.

Diversity(Recommendations: 3.2, 3.3, 3.4, 3.5)The Company has established a Diversity Policy, in accordance with which the Board may establish measurable objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress in achieving them. The Company’s Diversity Policy is summarised above in the section titled “Summary of Diversity Policy” and will be made available on the Company’s website.

The Board intends to set measurable objectives for achieving gender diversity during the forthcoming financial year and will report what these objectives are, and the Company’s progress in achieving them, in its 2013 annual report.

The proportion of women employees in the whole organisation, women in senior executive positions and women on the Board is set out in the following table:

Category Proportion of women

Whole organisation 14%

Senior executive positions 20%

Board 0%

Continuous Disclosure(Recommendations: 5.1, 5.2)The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability at a senior executive level for that compliance. A summary of the Company’s policy to guide compliance with ASX Listing Rule disclosure is included above under the section titled “Summary of Continuous Disclosure Policy” and will be made available on the Company’s website.

Shareholder Communication(Recommendations: 6.1, 6.2)The Company has designed a communications policy for promoting effective communication with Shareholders and encouraging Shareholder participation at general meetings. This is summarised above under the section titled “Summary of Shareholder Communication Strategy” and a summary will be made available on the Company’s website.

Risk Management(Recommendations: 7.1, 7.2, 7.3, 7.4)The Board has adopted a Risk Management Policy. This policy is summarised above under the section titled “Summary of Risk Management Policy” and a summary will be made available on the Company’s website.

The Board has resolved to formalise and document the management of its material business risks and expects to implement this system during the forthcoming financial year. This system is expected to include the preparation of a risk register by management to identify the Company’s material business risks and risk management strategies for those risks. In addition, the management of material business risks will be allocated to members of senior management. The risk register will be reviewed quarterly and updated as required.

The Board will require management to design, implement and maintain risk management and internal controls systems to manage the Company’s material business risks. The Board will also require management to report to it to confirm that those risks are being managed effectively.

When the Company lists on the ASX, the Board will require the Managing Director and the Chief Financial Officer (or equivalent) to provide a declaration to the Board in accordance with section 295A of the Corporations Act and to assure the Board that such declaration is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

For

per

sona

l use

onl

y


SECTION 11 ADDITIONAL INFORMATION

11.1 REGISTRATION

The Company was incorporated on 27 February 2012.

11.2 RIGHTS ATTACHING TO SHARES

The rights attaching to fully paid ordinary Shares in the issued capital of the Company are:

11.2.1 set out in the Constitution; and

11.2.2 in certain circumstances, regulated by the Corporations Act, the Listing Rules, the ASX Settlement Rules and the general law.

The following is a broad summary of the rights, privileges and restrictions attaching to all Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of Shareholders.

All Shares issued pursuant to this Prospectus will from the time they are issued, rank equally with all the Company’s existing issued Shares.

VotingSubject to any rights restrictions for the time being attached to any class or classes of shares, every Shareholder entitled to vote may vote in person or by proxy, attorney or representative at a meeting of Shareholders, and on a show of hands every Shareholder who is present in person or by proxy, attorney or representative has one vote, and on a poll every Shareholder who is present in person or by proxy, attorney or representative has one vote for every Share held, but, in respect of partly-paid shares, shall have a fraction of a vote for each partly-paid share.

A poll may be demanded before or immediately upon the declaration of the voting results on a show of hands by the chair of the meeting, by at least five Shareholders present in person or by proxy, attorney or representative and entitled to vote on the resolution, or by any one or more Shareholders who hold not less than 5% of the total voting rights of all those Shareholders having the right to vote on the resolution.

DividendsThe Directors are authorised to make all decisions regarding dividends in respect of Shares which are permitted under the Corporations Act.

Dividends shall (subject to the rights of any preference shareholders and to the right of the holders of any shares created or raised under any special arrangement as to dividend), be payable in the proportion which the amounts paid on shares bears to the total amounts paid and payable on the share.

The Directors may authorise the payment to Shareholders of an interim dividend as the Directors may determine.

Transfer of SharesA Shareholder may transfer Shares by a Proper ASTC Transfer (as defined in the Corporations Regulations); or an instrument in writing in any usual form or in any other form that the Directors approve.

The Directors may ask ASX Settlement to apply a holding lock to prevent a Proper ASTC Transfer or may decline to

register an instrument of transfer of Shares received, where permitted or required by the Listing Rules or the ASX Settlement Operating Rules, where the transfer is not in registrable form, where the Company has a lien on the Shares transferred, where the transfer may breach a law of Australia, where the holding would be less than a marketable parcel (in the case of paper-based transfers), where the transfer is not permitted under the terms of an employee incentive scheme.

Company must give written notice of the refusal, or the request for a holding lock, and the precise reasons for it: (a) to the holder of the shares, if the Company asks ASX Settlement to apply a holding lock to prevent a Proper ASTC Transfer; or (b) to the party lodging the transfer, if the Company declines to register any other transfer.

Meetings and NoticeEach Shareholder is entitled to receive notice of, and to attend, general meetings for the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the Constitution, the Corporations Act or the Listing Rules.

Winding UpSubject to the rights of Shareholders entitled to Shares with special rights in a winding up, all monies and property to be distributed between Shareholders shall be distributed to them in proportion to the Shares held by them (the amount that would otherwise be distributed to the holder of a partly paid share must be reduced by the amount unpaid on that share at the date of the distribution; and if the effect of the would be to reduce the distribution to the holder of a partly paid share to a negative amount, the holder must contribute that amount to the Company). A liquidator may, with the sanction of a special resolution of the Company, divide among the Shareholders in kind the whole or any part of the property of the Company and may determine how the division is to be carried out between Shareholders or different classes of Shareholders.

Shareholder LiabilityAs the Shares issued under the Prospectus are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

Alteration to the ConstitutionIn accordance with the Corporations Act, the Constitution can only be amended by a special resolution passed by at least three quarters of Shareholders present and voting at the general meeting. At least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

ASX Listing RulesIf the Company is admitted to the Official List, notwithstanding anything in the Constitution, if the Listing Rules prohibit an act being done, the act must not be done. Nothing in the Constitution prevents an act being done that the Listing Rules require to be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done or not to be done (as the case may be). If the Listing Rules require the Constitution to contain a provision or not to contain a provision the

For

per

sona

l use

onl

y

PROSPECTUS 193

Constitution is deemed to contain that provision or not to contain that provision (as the case may be). If a provision of the Constitution is or becomes inconsistent with the Listing Rules, the Constitution is deemed not to contain that provision to the extent of the inconsistency.

11.3 TERMS AND CONDITIONS OF UNLISTED OPTIONS

1 General

1.1 No monies will be payable for the grant of the Options.

1.2 A certificate will be issued for the Options.

1.3 The Options shall expire at 5.00pm Western Standard Time on the date that is 5 years from the date of issue (Expiry Date).

1.4 Subject to clauses 1.3 and 2, the Options may be exercised by the holder of the Options (Optionholder) at any time on or after the Company being admitted to the Official List.

The Board may, at its discretion, by notice to the Optionholder reduce, waive or vary (provided such variation is not adverse to the Optionholder) the exercise conditions attaching to Options under this clause 1.4 in whole or in part at any time and in any particular case, provided shareholder approval of the change is received.

1.5 Each Option shall carry the right to subscribe for one Share.

1.6 Options may be exercised in whole or in part in parcels of not less than 1,000 except if the Optionholder holds less than 1,000 Options. An exercise of only some Options shall not affect the rights of the Optionholder to the balance of the Options held by him.

1.7 The Shares allotted on the exercise of these Options shall be issued at an exercise price of A$0.30 per Share (Exercise Price), which price shall be payable in full on exercise of the Options.

1.8 Options shall only be exercisable by the delivery to the registered office of the Company of a notice in writing. The notice must specify the number of Options being exercised and must be accompanied by:

a) the Option certificate for those Options, for cancellation by the Company and reissue of a certificate for the remaining Options, if applicable; and

b) payment of the Exercise Price for each Share to be issued on exercise of the Options specified in the notice.

The notice is only effective (and only becomes effective) when the Company has received value for the full amount of the Exercise Price (for example, if the Exercise Price is paid by cheque, by clearance of that cheque) by the Expiry Date and subject to the Options the subject of the notice vesting in accordance with any exercise conditions stipulated in these terms and conditions.

1.9 The Company shall allot the resultant Shares and deliver the holding statements within 10 Business Days of the exercise of the Option.

1.10 These Options shall not be listed for Official Quotation.

1.11 The Options are transferable with prior approvable by the Board and as set out in clause 3.4.

1.12 Shares allotted pursuant to an exercise of Options shall rank, from the date of allotment, equally with existing Shares of the Company in all respects.

1.13 The Company shall, in accordance with the Listing Rules, make application to have Shares allotted pursuant to an exercise of Options listed for Official Quotation, if the Company is listed on the ASX at the time.

1.14 The Optionholder is not entitled to participate in any new issue of securities to existing holders of Shares in the Company unless:

a) the Optionholder has become entitled to exercise the Options under clauses 1.4 or 2; and

b) the Optionholder does so before the record date for the determination of entitlements to the new issue of securities and participates as a result of being a holder of Shares.

The Company must give the Optionholder, in accordance with the Listing Rules, notice of any new issue of securities before the record date for determining entitlements to the new issue.

1.15 If there is a bonus share issue (Bonus Issue) to the holders of Shares, the number of Shares over which an Option is exercisable will be increased by the number of Shares which the Optionholder would have received if the Option had been exercised before the record date for the Bonus Issue (Bonus Shares). The Bonus Shares must be paid up by the Company out of the profits or reserves (as the case may be) in the same manner as was applied in the Bonus Issue and upon issue rank pari passu in all respects with the other shares of that class on issue at the date of issue of the Bonus Shares.

1.16 There is no right to change the exercise price of an Option nor the number of underlying Shares over which the Option can be exercised, if the Company completes a pro rata issue.

1.17 If, prior to the expiry of any Options, there is a reorganisation of the issued capital of the Company, then the rights of a Optionholder (including the number of Options to which each a Optionholder is entitled and the Exercise Price) is changed to the extent necessary to comply with the Listing Rules applying to a reorganisation of capital at the time of the reorganisation (whether or not the Company is listed on the ASX at the time).

1.18 The Options will not give any right to participate in dividends until Shares are allotted pursuant to the exercise of the relevant Options.

For

per

sona

l use

onl

y


2 Takeover Provisions

Notwithstanding clause 1.4, all Options may be exercised by the Optionholder:

2.1 in the event a takeover bid (as defined in the Corporations Act) to acquire any Shares becomes or is declared to be unconditional, irrespective of whether the takeover bid extends to Shares issued and allotted after the date of the takeover bid or not; or

2.2 at any time after a Change of Control Event has occurred; or

2.3 if a merger by way of scheme of arrangement under the Corporations Act has been approved by the Court under section 411(4)(b) of the Corporations Act 2001.

3 Lapse of Options

3.1 Unless otherwise determined by the Board, if the Relevant Director ceases to be employed or engaged by the Company, then:

a) if the Relevant Director ceases to be employed or engaged by the Company for any reason other than a Specified Reason, any such Options held by the Optionholder will automatically lapse, whether or not any Options have become exercisable under clauses 1.4 or 2; or

b) if the Relevant Director ceases to be employed or engaged by the Company for a Specified Reason prior to the Options becoming exercisable under clauses 1.4 or 2, the Optionholder may exercise any such Options held by him within:

i. 3 months of the date of (as the case may be) Retirement, Redundancy, death or Total and Permanent Disablement; or

ii. such longer period as the Board determines,

c) subject to the Board, if applicable and in its absolute discretion, reducing, waiving or varying the exercise conditions applying to those Options in accordance with clause 1.4 so that those Options may be exercised. Options the subject of clause 3.1(b) not exercised within 3 months or the longer period determined by the Board, will automatically lapse; or

d) if the Relevant Director ceases to be employed or engaged by the Company for a Specified Reason after the Options becoming exercisable under clauses 1.4 or 2, the Optionholder may exercise any such Options held by him at any time prior to the Expiry Date.

e) A certificate signed by the company secretary of the Company stating that the Relevant Director ceased for any reason to be employed or engaged by the Company shall (in the absence of manifest error) be conclusive for the purposes of these terms, both as to such occurrence and the date of such occurrence.

3.2 A certificate signed by the company secretary of the Company stating that the Relevant Director ceased for any reason to be employed or engaged by the Company shall (in the absence of manifest error) be conclusive for the purposes of these terms, both as to such occurrence and the date of such occurrence.

3.3 Subject to clause 3.2, if at any time prior to the Expiry Date of any Options an Optionholder dies, the deceased Optionholder’s Legal Personal Representative may:

a) elect to be registered as the new holder of the deceased Optionholder’s Options;

b) whether or not he or she becomes so registered, exercise those Options in accordance with and subject to these terms as if he were the Optionholder of them; and

c) if the deceased Optionholder had already given the Company a notice of exercise of his or her Options, pay the Exercise Price in respect of those Options.

For the purposes of this Section 11.3:

Business Day means a day on which banks are open for general banking business in Perth, other than a Saturday or a Sunday or public holiday and which is also a business day for the purposes of the Listing Rules;

Change of Control Event means a shareholder, or group of associated shareholders, being entitled to sufficient shares in the Company to give it or them the ability, and that ability is successfully exercised, in a general meeting, to replace all or a majority of the Board;

Legal Personal Representative means the executor of the will or an administrator of the estate of a deceased person, the trustee of the estate of a person under a legal disability or a person who holds an enduring power of attorney granted by another person;

Official Quotation has the meaning ascribed to it in the Listing Rules;

Optionholder means the person holding these options, being the Relevant Director or the Relevant Director’s nominee, as the context requires;

Redundancy means a determination by the Board that the Company’s need to employ a person for the particular kind of work carried out by the Relevant Director has ceased (but, for the avoidance of any doubt, does not include the dismissal of the Relevant Director for personal or disciplinary reasons or where the Relevant Director leaves the employ of the Company of his own accord);

Relevant Director means a Director who accepted an offer of Options;

Retirement means retirement by the Relevant Director from the Company at age 60 or over or such earlier age as considered appropriate by the Board;

Specified Reason means Retirement, Total and Permanent Disablement, Redundancy or death; and

Total and Permanent Disablement means that the Relevant Director has, in the opinion of the Board and with effect on a date determined by the Board, after considering such medical and other evidence as it sees fit, become incapacitated to such an extent as to render the Relevant Director unlikely ever to engage in any occupation for which he is reasonably qualified by education, training or experience.

For

per

sona

l use

onl

y

PROSPECTUS 195

11.4 SUMMARY OF MATERIAL CONTRACTS

A summary of the contracts pursuant to which the Company has acquired an interest in each of the Minaçu Gold Project and the São Luis Gold Project is set out in the Brazilian Counsel Legal Opinion in Section 7.

Set out below is a summary of the more important provisions of contracts to which the Company (or one of its subsidiaries) is a party which may be material in terms of the Offer or the operation of the Company’s business, or otherwise may be relevant to a potential investor in the Company.

Silver Lake Loan AgreementThe Company and Silver Lake have entered into a loan agreement pursuant to which Silver Lake has agreed to advance the company a loan of $1,200,000 (Loan). The Loan is unsecured and interest free. The Loan is convertible into Shares at $0.06 per Share. Silver Lake has agreed to convert the Loan in full on the Conditional Approval Date. If the Conditional Approval Date does not occur by 31 December 2013, the Loan will be repayable on demand or converted at Silver Lake’s election.

Silver Lake Shareholder’s DeedSilver Lake and the Company have entered into a shareholder’s deed in relation to certain rights of Silver Lake in relation to its capacity as a Shareholder (Silver Lake Shareholder’s Deed). Under the Silver Lake Shareholder’s Deed, Silver Lake will be entitled to nominate persons to the Board and to nominate replacements for any nominee from time to time as follows:

a) for as long as Silver Lake holds a legal and beneficial interest in not less than 10% of the Shares, Silver Lake will be entitled to nominate one person to the Board; and

b) for as long as Silver Lake holds legal and beneficial interest in not less than 20% of the Shares, Silver Lake will be entitled to nominate a second person to the Board.

Under the Silver Lake Shareholder’s Deed, subject to the Company obtaining a waiver from Listing Rule 6.18, or receiving written notice from ASX that Listing Rule 6.18 does not apply, Silver Lake will be entitled to a top-up right to maintain its equity interest in the Company in the event that further equity issues are undertaken by the Company (Top Up Right). Silver Lake may only exercise the Top Up Right to the extent that such exercise would not cause it to have voting power in the Company exceeding 25%.

Pursuant to the terms of the Top Up Right, where the Company proposes to undertake any capital raising by way of the issue equity securities, the Company must at the same time as undertaking the issue grant Silver Lake the right to subscribe for such number and type of securities as to ensure that Silver Lake has the same percentage interest in the capital of the Company as it held prior to the issue calculated on a fully diluted basis, on terms no less favourable to Silver Lake than those attaching to the issue.

The issue of Shares pursuant to the exercise by the Silver Lake of the Top Up Right is subject to, and conditional upon, the Company obtaining all necessary shareholder approvals.

In addition, the Top Up Right will cease to apply if Silver Lake’s relevant interest in the Shares of the Company falls below 5%.

Baillieu MandateParinga and E.L. & C Baillieu Stockbroking Ltd (Baillieu) have entered into an agreement pursuant to which Baillieu will act as lead manager, corporate advisor and equity capital markets advisor to the Offer (Baillieu Mandate). The Baillieu Mandate provides that Baillieu will be entitled to a fee of 5% (exclusive of GST) on the gross amount of funds raised by Paringa under the Offer. Regardless of whether the Offer is completed, Paringa is required, pursuant to the Baillieu Mandate, to reimburse the Manager for all out-of-pocket expenses reasonably incurred as part of the assignment.

Contracts with DirectorsMaterial contracts relating to arrangements with Directors can be found at Section 11.5 below.

11.5 INTERESTS OF DIRECTORS

Directors’ Share and Option holdingsAt the date of this Prospectus, the Directors’ interests in the Company are as follows:

DirectorsOrdinary

Shares

Unlisted Options

having the terms and conditions set out in

Section 11.3

David Griffiths1 750,000 250,000

David Chapman2 3,000,000 1,000,000

Jonathan King 1,000,000 300,000

Luis Mauricio Azevedo 1,500,000 500,000

Notes:1. These securities are registered in the name of Portley Pty Ltd as trustee

for David Griffiths Super Fund an entity controlled by David Griffiths.

2. These securities are registered in the name of Parati Pty Ltd as trustee for the Parati Trust account an entity controlled by David Chapman.

Directors’ RemunerationNon-executive Directors’ fees to be paid by the Company effective from the date the Company is admitted to the Official List are as follows:

Director RoleDirector’s

Fees

David GriffithsNon-Executive Chairman $70,000

Luis Mauricio AzevedoNon-Executive Director $40,000

Non-Executive Directors’ fees not exceeding an aggregate of $600,000 per annum have been approved by the Company in a general meeting.

For

per

sona

l use

onl

y


Service Agreement – David ChapmanParinga has entered into a Service Agreement with David Michael Chapman (the Employee), Paringa’s Managing Director, which will commence the date on which Paringa is listed on the ASX on the following terms and conditions (Managing Director Service Agreement):

a) Salary: $330,000 per annum (excluding superannuation contributions at the rate of 10% p.a. and all fringe benefits tax payable by Paringa) less applicable taxation (Total Remuneration Package).

b) Termination with notice: either party may terminate the Managing Director Service Agreement by providing the other party six months’ notice in writing.

c) Termination by Paringa without notice: Paringa may summarily dismiss the Employee in the event of the Employee becoming bankrupt or insolvent; committing an act or acts which constitute serious and wilful misconduct; being convicted of a criminal offence which in the reasonable opinion of Paringa affects the proper performance of the Employee’s duties; or becoming physically or mentally incapacitated to the extent that the Employee is no longer able to carry out the duties under the Managing Director Service Agreement and for this purpose is incapacitated for three consecutive months or for an aggregate period of three months in any period of 12 months and is not taking personal leave for the duration of the absence. Paringa may also terminate the Managing Director Service Agreement without notice if the Employee abandons his employment by being absent without authorisation from Paringa for three consecutive workdays.

d) Redundancy: where the Employee’s position is made redundant and the Employee’s employment is, as a result of that redundancy, terminated, Paringa is required under the Managing Director Service Agreement to pay the Employee a severance payment equal to 12 months of the Employee’s current Total Remuneration Package, provided that the Employee has at least one year of continuous service with Paringa.

Service Agreement – Jonathan KingParinga has entered into a Service Agreement with Jonathan David King (the Employee), Paringa’s Technical Director, which will commence the date on which Paringa is listed on the ASX on the following terms and conditions (Technical Director Service Agreement):

a) Salary: $220,000 per annum (excluding superannuation contributions at the rate of 10% p.a. and all fringe benefits tax payable by Paringa) less applicable taxation (Total Remuneration Package).

b) Termination with notice: either party may terminate the Technical Director Service Agreement by providing the other party three months’ notice in writing.

c) Termination by Paringa without notice: Paringa may summarily dismiss the Employee in the event of the Employee becoming bankrupt or insolvent; committing an act or acts which constitute serious and wilful misconduct; being convicted of a criminal offence

which in the reasonable opinion of Paringa affects the proper performance of the Employee’s duties; or becoming physically or mentally incapacitated to the extent that the Employee is no longer able to carry out the duties under the Technical Director Service Agreement and for this purpose is incapacitated for three consecutive months or for an aggregate period of three months in any period of 12 months and is not taking personal leave for the duration of the absence. Paringa may also terminate the Technical Director Service Agreement without notice if the Employee abandons his employment by being absent without authorisation from Paringa for three consecutive workdays.

d) Redundancy: where the Employee’s position is made redundant and the Employee’s employment is, as a result of that redundancy, terminated, Paringa is required under the Technical Director Service Agreement to pay the Employee a severance payment equal to 12 months of the Employee’s current Total Remuneration Package, provided that the Employee has at least one year of continuous service with Paringa.

Non-Executive Directors’ Letters of AppointmentNon-Executive Directors’ letters of appointment provide that David John Griffiths (Non-Executive Chairman) will receive Directors’ fees of $70,000 per annum and Luis Mauricio Azevedo (Non-Executive Director) will receive Directors’ fees of $40,000 per annum, effective from the date Paringa is listed on the ASX.

Deeds of Indemnity, Access and InsuranceThe Company has entered into a deed of indemnity, access and insurance with each of its Directors and the company secretary.

Under these deeds, the Company indemnifies each Director and the company secretary to the extent permitted by law against any liability as a result of the Director (or company secretary) acting in such capacity with the Company.

The deeds also provide for the Company to agree to insure the Director (or company secretary) to the extent permitted by law against liabilities incurred by the Director (or company secretary) in acting in such a capacity except where unreasonable to do so or such insurance is unavailable. The policy must be maintained during the period from which the Director is an officer to the later of: the date which is 7 years after the Director ceases to be an officer of the Company; and the date any relevant proceedings have been finally resolved.

During the period from which the Director is an officer to the later of: the date which is 7 years after the Director ceases to be an officer of the Company; and the date any relevant proceedings have been finally resolved, the Director (or company secretary) is entitled, during office hours (or at such other times which the parties agree), to have access to and inspect the company records or records which have been either prepared, or provided to the Board, and are in any way relevant to the any proceedings relating to the Director (or company secretary’s) holding of office as a director (or company secretary).

For

per

sona

l use

onl

y

PROSPECTUS 197

Interests of DirectorsOther than as set out above or elsewhere in this Prospectus, no Director has, or had within two years before lodgement of this Prospectus with the ASIC, any interest in:

a) the promotion or formation of the Company;

b) property acquired or proposed to be acquired by the Company in connection with its promotion or formation or the Offer; or

c) the Offer.

Except as set out above, no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any Director:

a) to induce him to become, or to qualify him as, a Director; or

b) for services rendered by him in connection with the formation or promotion of the Company or the Offer.

11.6 INTERESTS OF PERSONS NAMED

Other than as set out below or elsewhere in this Prospectus, no person named in this Prospectus as performing a function in a professional, advisory or other capacity in connection with the preparation or distribution of this Prospectus, promoter or broker to the Company has, or had within two years before lodgement of this Prospectus with ASIC, any interest in:

a) the formation or promotion of the Company;

b) any property acquired or proposed to be acquired by the Company in connection with its formation or promotion or in connection with the Offer; or

c) the Offer,

and no amounts have been paid or agreed to be paid and no benefits have been given or agreed to be given to any of those persons for services rendered by him in connection with the formation or promotion of the Company or the Offer.

Grant Thornton Audit Pty Ltd has been appointed as auditor to the Company for which they will be paid their usual commercial rates. The Company has paid or will pay approximately $30,000 for these services exclusive of GST and disbursements. Grant Thornton Audit Pty Ltd has received no fees for other services provided to the Company during the 24 months preceding the lodgement of this Prospectus.

Grant Thornton Corporate Finance Pty Ltd has prepared the Investigating Accountant’s Report in Section 8 of this Prospectus. The Company has paid or will pay approximately $10,000 for these services exclusive of GST and disbursements. Grant Thornton has received no fees for other services provided to the Company during the 24 months preceding the lodgement of this Prospectus.

Coffey Mining Pty Ltd has received professional fees of approximately $50,000 for consultancy services in connection with this Prospectus including the provision of the Independent Geologist’s Report in Section 6. Coffey Mining Pty Ltd has not provided any other professional services to the Company during the 24 months preceding the lodgement of this Prospectus.

Gilbert + Tobin have acted as Australian solicitors to the Company in providing general advice in relation to this Prospectus. Gilbert + Tobin will receive professional fees of approximately $70,000 for providing general advice in relation to this Prospectus, exclusive of GST and disbursements. Gilbert + Tobin has not provided any other professional services to the Company during the 24 months preceding the lodgement of this Prospectus.

FFA Legal has acted as Brazilian counsel to the Company and will receive professional fees of approximately $40,000 for the provision of general advice in relation to this Prospectus and for the preparation of the Brazilian Counsel Legal Opinion contained in Section 7. FFA Legal has accrued fees relating to services totalling R$63,000 for other services provided to the Company in the 24 months preceding the lodgement of this Prospectus.

E.L. & C. Baillieu Stockbroking Ltd has acted as lead manager to the Offer and will receive broker and lead manager fees of approximately $500,000 for the these services. E.L. & C. Baillieu Stockbroking Ltd has not provided any other professional services to the Company during the 24 months preceding the lodgement of this Prospectus.

11.7 CONSENTS

Each of the parties referred to in this Section 11.7:

a) does not make, or purport to make, any statement in this Prospectus or on which a statement made in the Prospectus is based, other than as specified in this Section 11.7; and

b) to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Prospectus other than a reference to its name and a statement included in this Prospectus with the consent of that party as specified in this Section 11.7.

Grant Thornton Corporate Finance Pty Ltd has given its written consent to the inclusion in this Prospectus of its Investigating Accountant’s Report and to all statements referring to that report or attributed to or derived from that report in the form and context in which they appear and to the references to the historical financial information of the Company outlined in Section 5 as being audited or reviewed in the form and context in which those references appear and has not withdrawn such consent before lodgement of this Prospectus with ASIC.

Coffey Mining Pty Ltd has given its written consent to the inclusion in this Prospectus of its Independent Geologist’s Report and to all statements referring to that report or attributed to or derived from that report in the form and context in which they appear and has not withdrawn such consent before lodgement of this Prospectus with ASIC.

FFA Legal has given its written consent to the inclusion in this Prospectus of their Brazilian Counsel Legal Opinion and to all statements referring to that opinion or attributed to or derived from that opinion in the form and context in which they appear and has not withdrawn such consent before lodgement of this Prospectus with the ASIC.

For

per

sona

l use

onl

y


Each of the following has consented to being named in the Prospectus in the capacity as noted below and have not withdrawn such consent prior to the lodgement of this Prospectus with ASIC:

a) FFA Legal, as the Brazilian counsel to the Company;

b) Grant Thornton Corporate Finance Pty Ltd, as the Investigating Accountant;

c) Grant Thornton Audit Pty Ltd, as the auditor of the Company;

d) Gilbert + Tobin, as the Australian solicitors to the Company;

e) Coffey Mining Pty Ltd as the Independent Geologist; and

f) E.L. & C. Baillieu Stockbroking Ltd, as lead manager to the Offer.

There are a number of persons referred to elsewhere in this Prospectus who are not experts and who have not made statements included in this Prospectus nor are there any statements made in this Prospectus on the basis of any statements made by those persons. These persons did not consent to being named in the Prospectus and did not authorise or cause the issue of the Prospectus.

11.8 EXPENSES OF THE OFFER

It is estimated that the Company will pay the following costs in connection with the preparation and issue of this Prospectus and the making of the Offer (exclusive of GST):

ServiceEstimate of

Cash Cost ($)

Legal 70,000

Brazilian Counsel Legal Opinion 40,000

Independent Geological Report 50,000

ASIC and ASX Fees 67,000

Share Registry Costs 10,000

Broker and Lead Manager Fees 500,000

Investigating Accountant 10,000

Miscellaneous (Printing and mail) 60,000

Total Cash Costs 807,000

11.9 COMPANY TAX STATUS

The Directors expect the Company will be taxed in Australia as a public company.

11.10 LITIGATION

The Company is not involved in any material litigation or arbitration proceedings, nor, so far as the Directors are aware, are any such proceedings pending or threatened against the Company.

11.11 ELECTRONIC PROSPECTUS

Pursuant to Class Order 00/44, ASIC has exempted compliance with certain provisions of the Corporations Act to allow distribution of an Electronic Prospectus on the basis of a paper prospectus lodged with ASIC and the issue of Shares in response to an electronic Application Form, subject to compliance with certain provisions.

If you have received this Prospectus as an Electronic Prospectus please ensure you have received the entire Prospectus accompanied by the Application Form. If you have not, please contact the Company (at email: [email protected] or telephone +61 (0) 8 6313 3800 and the Company will send to you free of charge, either a hard copy, a further electronic copy of the Prospectus or both.

The Company reserves the right not to accept an Application Form from a person if it has reason to believe that when that person was given access to the electronic Application Form, it was not provided together with the Electronic Prospectus and any relevant supplementary or replacement prospectus or any of those documents were incomplete or altered. In such a case, the Application Monies received will be dealt with in accordance with Section 722 of the Corporations Act.

For

per

sona

l use

onl

y

PROSPECTUS 199

SECTION 12 DEFINITIONS

AEDST means Australian Eastern Daylight Savings Time.

$A or $ means Australian Dollars.

Applicant means a person who submits an Application.

Application means a valid application to subscribe for Shares.

Application Form means the form so described which is attached in this Prospectus.

Application Monies means monies paid under an Application.

ASIC means Australian Securities and Investments Commission.

ASX means ASX Limited ACN 008 624 691, and where the context permits, the Australian Securities Exchange operated by ASX Limited.

ASX Settlement means ASX Settlement Pty Ltd ACN 008 504 532.

ASX Settlement Rules means the settlement rules of ASX Settlement as amended from time to time.

Au is the chemical symbol for gold.

Auditor means Grant Thornton Audit Pty Ltd ACN 130 913 594.

Baillieu Mandate means the mandate pursuant to which the Company has engages the Lead Manager as summarised in Section 11.4 of this Prospectus.

Board means the Board of Directors of the Company unless the context indicates otherwise.

Business Day means a day other than a Saturday or Sunday on which banks are open for business in Perth, Western Australia.

C is the chemical symbol for carbon.

CHESS means the ASX Clearing House Electronic Sub-register System.

Closing Date means 23 November 2012.

Company or Paringa means Paringa Resources Limited ACN 155 933 010.

Conditional Approval Date means the date the Company receives Conditional Listing Approval.

Conditional Listing Approval means written approval from the ASX for admission of the Company to the Official List, subject only to customary conditions or conditions which the Company reasonably believes are capable of fulfilment.

Constitution means the constitution of the Company.

Corporations Act means the Corporations Act 2001 (Cth).

Corporations Regulations means the Corporations Regulations 2001 (Cth).

Director means a director of the Company.

Electronic Prospectus means the electronic version of this Prospectus.

Independent Geologist means Coffey Mining Pty Ltd ACN 065 481 209.

Independent Geologist’s Report means the report contained in Section 6 of this Prospectus.

Investigating Accountant means Grant Thornton Corporate Finance Pty Ltd ACN 003 265 987.

Investigating Accountant’s Report means the report contained in Section 8 of this Prospectus.

JORC Code means the Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves.

km means kilometres.

km² means square kilometres.

Lead Manager means E.L. & C. Baillieu Stockbroking Ltd ACN 006 519 393.

Listing Rules means the Listing Rules of the ASX.

M means million.

m means metres.

Offer means the invitation to apply for Shares pursuant to this Prospectus.

Offer Period means the period commencing on the Opening Date and ending on the Closing Date.

Official List means the Official List of the ASX.

Official Quotation means quotation of the Shares on the Official List.

Opening Date means 29 October 2012.

Option means an option to acquire a Share.

oz means ounces.

Paringa Brazil means Paringa Mineração Ltda, the Company’s wholly owned subsidiary.

Prospectus means this prospectus dated 15 October 2012 for the Offer and includes an Electronic Prospectus.

Resource means the JORC Code compliant mineral resource estimate (indicated and inferred categories) with respect to the Projects as detailed in the Independent Geologist’s Report.

Section means a section of this Prospectus.

Share means a fully paid ordinary share in the capital of the Company.

Share Registry means Security Transfer Registrars Pty Ltd.

Shareholder means a holder of Shares.

Silver Lake means Silver Lake Resources Limited ACN 108 779 782.

Silver Lake Loan Agreement means the loan agreement between the Company and Silver Lake as summarised in Section 11.4 of this Prospectus.

Silver Lake Shareholder’s Deed means the shareholder’s deed between the Company and Silver Lake as summarised in Section 11.4 of this Prospectus

Unlisted Option means an Option, exercisable at $0.30 each expiring 7 December 2017, full terms of which are disclosed at Section 11.3.

WST means Australian Western Standard Time.

For

per

sona

l use

onl

y


SECTION 13 DIRECTORS’ STATEMENT

The Directors state that they have made all reasonable enquiries and on that basis have reasonable grounds to believe that any statements made by the Directors in this Prospectus are not misleading or deceptive, and that in respect to any other statements made in the Prospectus by persons other than the Directors, the Directors have made reasonable enquiries and on that basis have reasonable grounds to believe that persons making the statement or statements were competent to make such statements, those persons have given their consent to the statements being included in this Prospectus in the form and context in which they are included and have not withdrawn that consent before lodgement of this Prospectus with ASIC, or to the Directors knowledge, before any issue of Shares pursuant to this Prospectus.

The Prospectus is prepared on the basis that certain matters may be reasonably expected to be known to likely investors or their professional advisers.

Each Director has consented to the lodgement of this Prospectus with ASIC and has not withdrawn that consent before lodgement of this Prospectus with ASIC or before any issue of Shares pursuant to this Prospectus.

Dated: 15 October 2012

Signed for and on behalf of the Company

David ChapmanManaging Director

For

per

sona

l use

onl

y

This Application Form relates to the Offer of a total of 33,333,333Shares in Paringa Resources Limited at $0.30 per Share pursuant tothe Prospectus dated 15 October 2012. The expiry date of theProspectus is the date which is 13 months after the date of theProspectus. The Prospectus contains information about investing in theShares of the Company and it is advisable to read this document beforeapplying for Shares. A person who gives another person access to thisApplication Form (whether in paper or electronic form) must at the sametime and by the same means give the other person access to theProspectus, and any supplementary prospectus (if applicable). Whilethe Prospectus is current, the Company will send paper copies of theProspectus, and any supplementary prospectus (if applicable), and anApplication Form, on request and without charge.

PARINGA RESOURCES LIMITEDACN: 155 933 010

APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

E & O.E.

5

REGISTRY DATE STAMP

Declaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate and this application is lodged in accordance with the Prospectus and any supplementary Prosepctus(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable) free of charge if I/we request so during the currency of the Prospectus.(6) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided.

BROKER STAMP

Broker Code

Advisor Code

Shares at AUD $0.30 per share Aor such lesser number of Shares which may be allocated to me/us by their Directors.

Title (e.g.: Dr, Mrs) Given Name(s) or Company Name

Title (e.g.: Dr, Mrs) Given Name(s) or Company NameJoint Applicant #2

Full Name of Applicant / Company


(e.g.: THE SMITH SUPER FUND A/C)Account Designation

< >Postal Address

/Unit Street Number Street Name or PO BOX

PostcodeStateSuburb/Town/City

Country Name (if not Australia)

(where applicable)CHESS HIN

X If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.

Contact Number

( )Contact Name

Email Address

@Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)

I/We apply for:

, ,I/We lodge full application of monies of:

$ , , .

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORMBefore completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.

2222111122228888555599995555555533330000

For

per

sona

l use

onl

y

APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.

Insert the number of Shares you wish to apply for. The application must be for a minimum of 6,667 Shares and thereafter in multiples of 1,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.

Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.

PAYMENTAll cheques should be made payable to PARINGA RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed"Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and theacceptance deemed to be invalid.

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:

Posted to: OR Delivered to:PARINGA RESOURCES LIMITED - SHARE ACCOUNT PARINGA RESOURCES LIMITED - SHARE ACCOUNTC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153

Applications must be received by no later than 5:00PM (AWST) on the Closing Date 23rd November 2012 which may be changed immediately after the Opening Date atany time and at the discretion of the Company.

CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.

TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.

CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to PARINGARESOURCES LIMITED. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may beincluded by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.

Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.

Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams

Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>

Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or

<Estate John Smith A/C> John Smith Deceased

Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>

Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith

<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund

<JSuper Fund A/C>

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 15 OCTOBER 2012 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

This Application Form relates to the Offer of Fully Paid Shares in PARINGA RESOURCES LIMITED pursuant to the Prospectus dated 15th October 2012.

PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

3333444466669999555599995555555533339999

For

per

sona

l use

onl

y

PROSPECTUS 203

This Application Form relates to the Offer of a total of 33,333,333Shares in Paringa Resources Limited at $0.30 per Share pursuant tothe Prospectus dated 15 October 2012. The expiry date of theProspectus is the date which is 13 months after the date of theProspectus. The Prospectus contains information about investing in theShares of the Company and it is advisable to read this document beforeapplying for Shares. A person who gives another person access to thisApplication Form (whether in paper or electronic form) must at the sametime and by the same means give the other person access to theProspectus, and any supplementary prospectus (if applicable). Whilethe Prospectus is current, the Company will send paper copies of theProspectus, and any supplementary prospectus (if applicable), and anApplication Form, on request and without charge.

PARINGA RESOURCES LIMITEDACN: 155 933 010

APPLICATION FORMTHIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

E & O.E.

5

REGISTRY DATE STAMP

Declaration and Statements:(1) I/We declare that all details and statements made by me/us are complete and accurate and this application is lodged in accordance with the Prospectus and any supplementary Prosepctus(2) I/We agree to be bound by the Terms & Conditions set out in the Prospectus and by the Constitution of the Company.(3) I/We authorise the Company to complete and execute any documentation necessary to effect the issue of Securities to me/us.(4) I/We have received personally a copy of the Prospectus accompanied by or attached to this Application form, or a copy of the Application Form or a direct derivative of the Application Form before applying for the Securities.(5) I/We acknowledge that the Company will send me/us a paper copy of the Prospectus and any Supplementary Prospectus (if applicable) free of charge if I/we request so during the currency of the Prospectus.(6) I/We acknowledge that returning the Application Form with the application monies will constitute my/our offer to subscribe for Securities in the Company and that no notice of acceptance of the application will be provided.

BROKER STAMP

Broker Code

Advisor Code

Shares at AUD $0.30 per share Aor such lesser number of Shares which may be allocated to me/us by their Directors.

Title (e.g.: Dr, Mrs) Given Name(s) or Company Name


Full Name of Applicant / Company


(e.g.: THE SMITH SUPER FUND A/C)Account Designation

< >Postal Address

/Unit Street Number Street Name or PO BOX

PostcodeStateSuburb/Town/City

Country Name (if not Australia)

(where applicable)CHESS HIN

X If an incorrect CHESS HIN has been provided (e.g.: incorrect number, registration details do notmatch those registered) any securities issued will be held on the Issuer Sponsored subregister.

Contact Number

( )Contact Name

Email Address

@Tax File Number / Australian Business Number Tax File Number of Security Holder #2 (Joint Holdings Only)

I/We apply for:

, ,I/We lodge full application of monies of:

$ , , .

PLEASE READ CAREFULLY ALL INSTRUCTIONS ON THE REVERSE OF THIS FORMBefore completing this Application Form you should read the accompanying Prospectus and the instructions overleaf. Please print using BLOCK LETTERS.

2222111122228888555599995555555533330000

For

per

sona

l use

onl

y


APPLICATION FORMSPlease complete all parts of the Application Form using BLOCK LETTERS. Use correct forms of registrable name (see below). Applications using the wrong form of name may berejected. Current CHESS participants should complete their name and address in the same format as they are presently registered in the CHESS system.

Insert the number of Shares you wish to apply for. The application must be for a minimum of 6,667 Shares and thereafter in multiples of 1,000 Shares. The applicant(s) agree(s)upon and subject to the terms of the Prospectus to take any number of Shares equal to or less than the number of Shares indicated on the Application Form that may be allotted to theapplicants pursuant to the Prospectus and declare(s) that all details of statements made are complete and accurate.

No notice of acceptance of the application will be provided by the Company prior to the allotment of Shares. Applicants agree to be bound upon acceptance by the Company of theapplication.

Please provide us with a telephone contact number (including the person responsible in the case of an application by a company) so that we can contact you promptly if there is aquery in your Application Form. If your Application Form is not completed correctly, it may still be treated as valid. There is no requirement to sign the Application Form. TheCompany's decision as to whether to treat your application as valid, and how to construe, amend or complete it shall be final.

PAYMENTAll cheques should be made payable to PARINGA RESOURCES LIMITED - SHARE ACCOUNT and drawn on an Australian bank and expressed in Australian currency and crossed"Not Negotiable". Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and theacceptance deemed to be invalid.

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured. Do not forward cash as receipts will not be issued.

LODGING OF APPLICATIONSCompleted Application Forms and cheques must be:

Posted to: OR Delivered to:PARINGA RESOURCES LIMITED - SHARE ACCOUNT PARINGA RESOURCES LIMITED - SHARE ACCOUNTC/- Security Transfer Registrars Pty Ltd C/- Security Transfer Registrars Pty LtdPO Box 535 770 Canning HighwayAPPLECROSS WA 6953 APPLECROSS WA 6153

Applications must be received by no later than 5:00PM (AWST) on the Closing Date 23rd November 2012 which may be changed immediately after the Opening Date atany time and at the discretion of the Company.

CHESS HIN/BROKER SPONSORED APPLICANTSThe Company intends to become an Issuer Sponsored participant in the ASX CHESS System. This enables a holder to receive a statement of holding rather than a certificate. If youare a CHESS participant (or are sponsored by a CHESS participant) and you wish to hold shares allotted to you under this Application on the CHESS subregister, enter your CHESSHIN. Otherwise, leave this box blank and your Shares will automatically be Issuer Sponsored on allotment.

TAX FILE NUMBERSThe collection of tax file number ("TFN") information is authorised and the tax laws and the Privacy Act strictly regulate its use and disclosure. Please note that it is not against the lawnot to provide your TFN or claim an exemption, however, if you do not provide your TFN or claim an exemption, you should be aware that tax will be taken out of any unfrankeddividend distribution at the maximum tax rate.If you are completing the application with one or more joint applicants, and you do not wish to disclose your TFN or claim an exemption, a separate form may be obtained from theAustralian Taxation Office to be used by you to provide this information to the Company. Certain persons are exempt from providing a TFN. For further information, please contactyour taxation adviser or any Taxation Office.

CORRECT FORM OF REGISTRABLE TITLENote that only legal entities are allowed to hold securities. Applications must be in the name(s) of a natural person(s), companies or other legal entities acceptable to PARINGARESOURCES LIMITED. At least one full given name and the surname are required for each natural person. The name of the beneficiary or any other non-registrable name may beincluded by way of an account designation if completed exactly as described in the example of the correct forms of registrable names below:

TYPE OF INVESTOR CORRECT INCORRECTIndividual Mr John Alfred Smith J A SmithUse given names in full, not initials.

Company ABC Pty Ltd ABC P/L or ABC CoUse the company's full title, not abbreviations.

Joint Holdings Mr Peter Robert Williams & Peter Robert &Use full and complete names. Ms Louise Susan Williams Louise S Williams

Trusts Mrs Susan Jane Smith Sue Smith Family TrustUse trustee(s) personal name(s), Do not use the name of the trust. <Sue Smith Family A/C>

Deceased Estates Ms Jane Mary Smith & Estate of Late John SmithUse the executor(s) personal name(s). Mr Frank William Smith or

<Estate John Smith A/C> John Smith Deceased

Minor (a person under the age of 18) Mr John Alfred Smith Master Peter SmithUse the name of a responsible adult with an appropriate designation. <Peter Smith A/C>

Partnerships Mr John Robert Smith & John Smith and SonUse the partners' personal names. Do not use the name of the partnership. Mr Michael John Smith

<John Smith and Son A/C>Superannuation FundsUse the name of the trustee(s) of the super fund. Jane Smith Pty Ltd Jane Smith Pty Ltd Superannuation Fund

<JSuper Fund A/C>

TO MEET THE REQUIREMENTS OF THE CORPORATIONS ACT, THIS FORM MUST NOT BE HANDED TO ANY PERSONUNLESS IT IS ATTACHED TO OR ACCOMPANIED BY THE PROSPECTUS DATED 15 OCTOBER 2012 AND ANY RELEVANT SUPPLEMENTARY PROSPECTUS.

This Application Form relates to the Offer of Fully Paid Shares in PARINGA RESOURCES LIMITED pursuant to the Prospectus dated 15th October 2012.

PRIVACY STATEMENT Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments andother corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details ofyour personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

3333444466669999555599995555555533339999

For

per

sona

l use

onl

y

www.colliercreative.com.au #PRL0001

For

per

sona

l use

onl

y

www.paringaresources.com

For

per

sona

l use

onl

y

for personal use only - asx · barra da tijuca – rio de janeiro for personal use only brazil...

Documents